Discussions at the Asian Metal Indium and Germanium Forum (May 9 to 11 in Nanjing) were focused on two topics this year; Germanium buyers were inquiring as to the reasons behind the metal’s recent price growth, while indium producers and traders contemplated whether indium prices will continue their current rally.
As reported here on SM Report, germanium prices have been moving invariably upward since late last year. In April, prices grew by another twenty percent, although purchasers have been left wonting for an explanation as to why. While demand for germanium dioxide has rebounded over the past year, demand from the germanium optical lens industry continues to be limited by declining military spending. It is the first time in over a decade that germanium prices have decoupled from military spending and, instead, have begun to show greater dependence on demand for germanium dioxide. Whether this is a long-term development remains to be seen.
Although indium prices have not risen as sharply as germanium prices, there still remains high expectations that the current rally is not over. Both indium buyers and sellers are also beginning to acknowledge the influence that indium speculators are having on the market. As material is diverted – or held – from the market by speculators, consequent supply constraints have pushed prices higher than some analysts initially expected. Indium Corp., nevertheless, believes that greater reclaim recovery yields, along with increased global primary production will reduce current demand strains over the coming two to three years.
SMI Ltd. is advising clients to expect indium prices to continue higher in the second half of 2011, as producers and speculators both look to capitalize on the currently strong demand. Germanium users, meanwhile, should not expect any significant drops in germanium prices until late Q3 or Q4 2011. However, without greater demand from the optical lens industry, germanium producers will be hard-pressed to hold current price levels into 2012.
