International trade in critical raw materials

Selection of critical raw materials for this article

Since 2011, an assessment report is published every three years which has the aim of assessing the materials considered as critical.
In 2020, the European Commission made a foresight study of critical raw materials for strategic technologies and sectors in the EU. The document identifies 24 materials that are important for three sectors: renewables, e-mobility and defence & space. For each of these materials the supply risk was identified as shown in Figure 1. This article provides data on the materials with a very high or high supply risk. In addition, gallium was also analysed because of the recent restrictions introduced by China on the export of gallium as well as of germanium.

Figure 1 identifies seven materials with very high or high supply risk: light rare earth elements (LREEs), heavy rare earth elements (HREEs), magnesium, niobium, germanium, borates and scandium. Due to data restrictions, it is not possible to identify LREEs and HREEs separately, nor is it possible to distinguish them from scandium and yttrium. Consequently, the LREE’s, HREE’s, scandium and yttrium are reported together as REE+. Furthermore, although niobium is a combination of several codes in the collection of trade data, due to data confidentiality, reporting in this article is restricted to ferro-niobium. In June 2023, China announced export restrictions for germanium and gallium. For that reason, gallium is also considered in this article.

To summarise, in this article the following products will be discussed: rare earth elements including scandium and yttrium (REE+), magnesium, ferro-niobium, germanium, borates and gallium. All the materials analysed in this article were identified as critical in the EU assessment reports disseminated since 2011. The data will show the main supplying countries in 2022 as well as imports and exports for the period 2019 to 2022. A detailed list of the product codes making up the materials discussed in this article is presented in the section on data sources.

Figure 1: Critical raw materials and their supply risk
Source: Joint research centre

Rare earths elements, scandium and yttrium (REE+)

REE+ are a set of seventeen chemical elements in the periodic table, specifically the fifteen lanthanides plus scandium and yttrium. They are used in everyday technologies like cellphones and computers but also in advanced medical technologies like MRIs, laser scalpels and even some cancer drugs. In defense applications, they are used in satellite communications, guidance systems and aircraft structures. They are critical in a number of green technologies, especially those that are going to support net zero carbon emissions goals, like wind turbines and electric vehicles.

The volume of imports of REE+ products increased significantly in 2021 and 2022, with their price not changing much between 2019 and 2022 (see Figure 2). Conversely, the volume of exports of REE+ remained almost stable but export prices increased significantly in 2021 and 2022. In 2022, the ratio of imports to exports measured in volume was 2.7, meaning the EU imported 2.7 tonnes for every tonne it exported.

Figure 2: Imports and exports of REE+
(€ million)
Source:Comext DS-018995

The bulk of EU imports of REE+ originated from China, both in general and for seven of the ten detailed products shown in Table 1. For the three most imported products, the concentration of imports, as measured by the share of the top-3 importers was more than 95 %. Finally, the ratio between imports and exports in quantity shows that the EU imports 2.7 tonnes for each tonne exported.

Table 1: Largest partners for imports of REE+ by product code in 2022
(data in tonnes)
Source: Comext DS-018995

Magnesium

Magnesium is a chemical element which has applications in automotive, aerospace, electronics and biomedical industries. Even if magnesium is the eighth most abundant element in the earth’s crust, it has been listed in the EU Critical Raw Materials list since 2011 because of the large EU dependency, especially for the extraction and processing stages.

Imports remained stable in volume between 2019 and 2021 before increasing significantly in 2022, with a growth of 58 % compared to 2021 (see Figure 3). For exports, although the quantity is significantly lower than for imports, a similar pattern is visible with an increase in 2022 of 64 % compared to 2021. The price increase was even higher for exports, which more than doubled in 2022 (from 3.2 €/kg to 7.4 €/kg) while import prices increased by more than 50 % (from 2.9 €/kg to 4.4 €/kg).

Figure 3: Imports and exports of magnesium
(€ million)
Source: Comext DS-018995

For its imports of magnesium, the EU was extremely dependent on Chinese imports which made up 97 % of all magnesium imports into the EU. In the case of magnesium, the ratio between imports and exports in quantity was equal to 8.5, which means that the EU imports 8.5 tonnes of magnesium against one tonne exported.

Table 2: Largest partners for imports of magnesium by product code in 2022
(data in tonnes)
Source: Comext DS-018995

Ferro-niobium

Ferro-niobium is an important iron-niobium alloy, mainly used in automotive, construction and steel industry. Ferro-niobium is considered as a critical raw material, not only due to its supply risk but also due to its economic importance for the EU and limited substitutability by other raw materials.

Between 2019 and 2022, imports and exports of ferro-niobium were fairly stable (see Figure 4). However, import prices rose from €19.2 per kg to €23.9 per kg and export prices rose from €19.2 per kg to €28.6 per kg.

Figure 4: Imports and exports of ferro-niobium
(€ million)
Source: Comext DS-018995

For its imports of ferro-niobium, the EU was very dependent on Brazilian imports which made up 84 % of all ferro-niobium imports into the EU. Brazil was followed at some distance by Canada from where 16 % of EU imports of ferro-niobium originated (see Table 3). The ratio between imports and exports is extremely high and equal to 11.0, which means that the EU imports 11 tonnes of ferro-niobium for each tonne exported.

Table 3: Largest partners for imports of ferro-niobium by product code in 2022
(data in tonnes)
Source: Comext DS-018995

Germanium

Germanium is used in high technology applications such as infrared systems, fiber optics, polymer catalysis, electronics and solar cells. Its demand is expected to increase due to the lack of suitable substitutes and increasing demand for solar cells and 5G networks.

Imports of germanium increased significantly between 2019 and 2022, growing by almost 50 % in value and 40 % in quantity (see Figure 5). Conversely, the exports of germanium were more stable between 2019 and 2022.

Figure 5: Imports and exports of germanium
(€ million)
Source: Comext DS-018995 and estimations

Just over two thirds of germanium imports originated in China followed at some distance by Japan (11 %) and Australia (9 %). Combined, these top three countries accounted for 87 % of all EU imports (see Table 4). Similarly to what was observed for ferro-niobium, the ratio between imports and exports is extremely high with a value equal to 10.0.

Table 4: Largest partners for imports of germanium by product code in 2022
(data in tonnes)
Source: Comext DS-018995

Borates

Borates are a key input material in the production of fiberglass insulation, textile fiberglass, borosilicate glass, ceramics and fertilisers. Borates can be found in many automotive parts, notably in many components for electric cars, playing a key role for the transition of the EU to the green mobility.

Imports of borates decreased from close to 500 tonnes in 2019 to just below 400 tonnes in 2022 (see Figure 6). However, due to the increasing prices, the value of these imports did not change much. Exports of germanium dropped both in value and in quantity between 2019 and 2022.

Figure 6: Imports and exports of borates
(€ million)
Source: Comext DS-018995

Türkiye is the largest origin for the top-3 of the ten borates shown in Table 5 and also occurs as one of the top-5 partners for all of the other borates. Overall, 90 % of borates originated in Türkiye, followed by the United States with 7 %.

Table 5: Largest partners for imports of borates by product code in 2022
(data in tonnes)
Source: Comext DS-018995

Gallium

Imports of gallium grew from 26 tonnes in 2019 to 51 tonnes in 2022 (see Figure 7). In the same period exports grew from 4 tonnes to 29 tonnes. Thus, the balance in both years was equal to 22 tonnes. Both import and export prices of gallium grew strongly in 2022.

Figure 7: Imports and exports of gallium
(€ million)
Source: Comext DS-018995

For its imports of gallium, the EU was extremely dependent on Chinese imports being the origin of 96 % of all gallium imports into the EU (see Table 6).

Table 6: Largest partners for imports of gallium by product code in 2022
(data in tonnes)
Source: Comext DS-018995