China's Rare Metal Export Restrictions Cause Bismuth Prices to Soar

Increased demand and supply concerns drive bismuth prices to a 10-year high

China's recent expansion of rare metal export restrictions has triggered a sharp increase in the price of bismuth, a relatively lesser-known but critical industrial material. According to Bloomberg News on February 17 (local time), this regulatory move has led to a surge in bismuth prices, reaching their highest level in a decade.

Bismuth is widely used in various industries, including low-melting-point alloys, casting, automotive coatings, and paint production. Notably, the metal plays a crucial role in the defense sector. Following China's decision to tighten export controls on February 4, bismuth prices skyrocketed by 38%, reaching $8.25 per pound. The new restrictions require exporters to obtain a government-issued license before selling the metal overseas, creating significant supply chain disruptions.

The Chinese government implemented these measures in response to the United States' recent move to impose a 10% tariff on all Chinese imports. As a countermeasure, China placed export restrictions on five key metals, including bismuth, tungsten, and indium. Given that China accounts for 80% of the global bismuth supply, this decision has major implications for international markets. In recent years, approximately two-thirds of the bismuth imported by the United States has originated from China, highlighting the country's dominant position in the market.

Chen Qiqi, an analyst at Mysteel Global, stated that due to the lengthy licensing approval process, China's bismuth ingot exports will likely be temporarily halted. Market traders, anticipating further price increases, have already begun stockpiling bismuth in response to potential supply shortages.

Beyond its applications in the defense industry, bismuth is also an essential component in electronics manufacturing, energy storage systems, and various high-tech applications. The latest export restrictions are expected to have a widespread impact on global supply chains, particularly affecting industries and countries highly dependent on Chinese bismuth.

As supply concerns grow, countries and corporations will need to explore alternative sources of bismuth or invest in recycling technologies to mitigate supply chain risks. The current situation underscores the increasing importance of diversifying rare metal supply chains and strengthening resource security on a global scale.