The gallium market is primarily driven by demand for communication and display electronics. The production of gallium arsenide (GaAs), a semiconductor that is used in smart phones and other handset devices as well as light emitting diodes (LEDs), accounts for roughly three-quarters of all demand for the metal. Gallium nitride, which is used in manufacture of LED lighting, however, has been a major driver of growth for the market over the past decade.
Gallium substrates are also used to produce CIGS (copper-indium-gallium-selenide) photovoltaic cells. Although only occupying a small share of the solar market, continuing growth in this industry could prove to be an integral part of the gallium market.
Other applications for gallium include as a phosphor material (gallium trioxide) in LED lighting, as a dopant in NdFeB (neodymium-iron-boron) rare earth magnets and as an alloying element in the eutectic alloy galinstan (gallium-indium-tin).
On the supply side, gallium occurs in bauxite and is extracted from spent liquor at aluminum refineries. This relationship between aluminum and gallium is critical to supply of the metal. Not surprisingly, China, the largest refiner of aluminum is also the world's largest source of refined gallium.
While Chinese production accounts for the majority of the 300 to 400 metric tonnes of gallium refined each year, up to one-third of all production is attributed to recycling of scrap materials.
Large amounts of gallium-containing scraps are produced during the manufacture - cutting and polishing - of gallium arsenide wafers. Most recycling of gallium materials occurs in Japan, Europe and North America.
Despite growing demand for the metal since 2011, gallium prices have been declining as a result of large-scale expansions in production capacity. Between 2010 and 2014, while global primary production capacity more than doubled, prices fell from over US$ 700 per kilogram to under US$ 300 per kilogram.