European Germanium Prices Hold Steady Amidst Lower Consumption At the End of September 2023

The price of Germanium shows a static price trend in the German spot market as the demand from the downstream semiconductor industries remained firm. The outlook is expected to rise in the upcoming fourth quarter of 2023 as the European Union places new strategies to boost the semiconductor chip-making industry and supports the European Chips Act. The export curtailment from the overseas Chinese markets still drastically impacts the supply chain of Germanium in the European nations. Additionally, the lowering water level in the Panama Canal has caused serious issues, disrupting the trading activity of various resources, including Germanium.

The Germanium price decline was backed by the fact that the major downstream semiconductor industries are facing a tough time attracting domestic and international buyers. The demand for consumer devices, including smartphones and PCs, has remained low in the European region, impacting a decline in sales rate and minimizing the consumption of Germanium. NVIDIA, a major global smart chips manufacturer, has been facing a tough time as the competition from the overseas artificial intelligence market has shown a pessimistic sentiment at the end of the third quarter of 2023.

Moreover, the European Chips Act entered into force the past week, raising hopes for Germanium amidst the European Union launching a comprehensive set of measures to ensure supply security, resilience, and technological leadership in semiconductor technologies and applications. It intends to attract investment, encourage research and innovation, foster the growth of a European semiconductor industrial base, and position Europe for potential future chip supply crises. The program could mobilize USD 45 billion in public and private investment, including the USD 3.4 billion from the EU budget, to double the EU’s global market share in semiconductors from 10% now to at least 20% by the end of 2023. The upcoming months expect a boost in demand for Germanium as the deal signed between the major industries such as NVIDIA, Hyundai, and many others are planning to expand their production rate for the Semiconductor and electric vehicle industries.

Furthermore, the supply disruption from the overseas Chinese mills has kept the inventory level of Germanium at a lower rate. Additionally, the lower water level, impacted by the lack of rainfall, in the Panama Canal has been a major concern for the Global Germanium trade. Panama Canal depends on the water level of Gatún Lake, an artificial water source that connects the transit line between the Atlantic and Pacific market regions. Meanwhile, to tackle the current trade disruptions, the Panama Canal has announced that it will modify the variable component of the Fresh Water Charge (FWC), which will take effect on 1st October.

According to ChemAnalyst, the price of Germanium is expected to increase in the last quarter of 2023 as consumption from the downstream semiconductor industries will boost. Additionally, the demand from the end-use electric vehicle industry will likely increase as Hyundai plans to expand its manufacturing line in the forthcoming period.