By Ashitha Shivaprasad (Reuters) -Hafnium prices are near record highs in Europe, driven by supply constraints due to China's export controls and booming demand fuelled by AI-led growth in
Hafnium Prices Surge in Europe Amid China Export Restrictions and AI Demand
Factors Driving Hafnium Price Increases
By Ashitha Shivaprasad
Impact of China's Export Controls
(Reuters) -Hafnium prices are near record highs in Europe, driven by supply constraints due to China's export controls and booming demand fuelled by AI-led growth in semiconductors and gas turbines.
Rising Demand from AI and Nuclear Sectors
Prices for the metal used in aerospace, nuclear, and computing applications ranged between $6,300 and $7,000 per kg in Rotterdam, nearing the record high of $7,100 reached in 2023, according to information agency Argus.
Hafnium in Semiconductors and Gas Turbines
Hafnium, a byproduct of zirconium refining, typically occurs at a ratio of 1 part hafnium to every 50 parts zirconium, making its separation complex and costly. The United States Geological Survey (USGS) listed China, Germany, and the Netherlands as the top exporters of unwrought hafnium in 2024.
Market Trends and Pricing Insights
China tightened export controls on hafnium under revised dual-use regulations in 2024, meaning exporters require more stringent government licensing to ship the material abroad, analysts and traders said.
"Latest wave of geopolitical tensions have increased pressure. Very few parties are able to have their licenses granted or get material actually exported," said a minor metal trader, referring to China's tightening grip on hafnium exports.
"Companies without a track record of handling dual-use items or prior export licenses are suddenly not being granted them at all," the trader added.
China's unwrought hafnium exports plunged from 5,001 kg in January to 499 kg in September, a 90% decline over nine months, according to customs data.
Cristina Belda, hafnium pricing specialist at Argus, said demand was rising across multiple sectors for both hafnium metal and hafnium dioxide, particularly for use in semiconductors and memory technologies.
"The clamour for hafnium is also being fuelled by demand for gas turbines, particularly for powering AI data centres ... Demand for nuclear power is also expected to increase hafnium usage," Belda added.
Hafnium is used in gas turbines to make heat-resistant superalloys, which help power artificial intelligence data centres, and in memory chips, where hafnium oxide enables fast, efficient data storage. It is also valued for its anti-corrosive properties and used to make control rods for nuclear reactors.
Market sources highlighted that U.S. hafnium prices were trading even higher, mostly above $7,000 per kg, due to tighter availability.
(Reporting by Ashitha Shivaprasad; Editing by Himani Sarkar)
