Rattled by China, West scrambles to rejig critical minerals supply chains


By Amy Lv, Divya Rajagopal and Ernest Scheyder

BEIJING/TORONTO/LONDON (Reuters) – China’s trade restrictions on strategic minerals are starting to hit Western companies where it hurts.

Blaming Beijing’s curbs on antimony exports announced in August, German chemicals and consumer goods heavyweight Henkel told customers last month it had declared force majeure and suspended deliveries of four types of adhesives and lubricants widely used by automakers, according to a Nov. 8 letter to clients reviewed by Reuters.

Henkel (HEN3.DE) uses the silvery metal to make its Bonderite and Teroson-branded products, core parts of the company’s adhesive technologies division, which brought in 10.79 billion euros ($11.4 billion) in revenue last year.

“We have been notified by our suppliers that the importation of these raw materials has been delayed pending the Chinese government accepting license applications,” according to the letter, which was signed by two senior executives.

“As a result, Henkel is hereby declaring force majeure in connection with its deliveries of these products,” the German company also said, adding it was unable to predict the duration of the situation.

The letter from Henkel, which had not been reported previously, and conversations with more than two dozen traders, miners, processors, end-users, and industry experts in North America, Europe and China underscore the severe disruption caused by Beijing’s trade restrictions and highlight how Western players’ struggle to replace China-based supply chains.

Contacted by Reuters about the letter, Henkel said it was working to support its customers and find alternative supplies: “We are monitoring the global supply situation of antimony very closely and aim to restore solutions to fulfill our customers’ orders.”

The price of antimony, scarce in nature but essential for military equipment such as ammunition, infrared missiles, nuclear weapons, and night vision goggles, rallied nearly 230% this year to about $39,000 per metric ton in Rotterdam’s busy spot market, according to market intelligence provider Argus.

China is the world’s largest antimony producer and dominates the production of many strategic materials.

Last year, Beijing also limited exports of gallium and germanium – used for semiconductors, solar panels and weapons – as well as certain types of graphite – a key component in EV batteries.

Responding to a fresh U.S. crackdown on China’s chip industry, Beijing this week further ratcheted up pressure, imposing an outright ban on exports of gallium, germanium and antimony to the United States, where Henkel makes Bonderite in Michigan.



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