A sharp rise in tungsten prices illustrates the risks facing German industry as access to critical raw materials becomes more uncertain. After China restricted tungsten exports, the cost of an important intermediate product temporarily increased by as much as 500 percent, according to the report.
The price shock is part of a broader problem identified in a new analysis by Boston Consulting Group (BCG), seen exclusively by Handelsblatt. The consultancy says industrial companies are underestimating their dependence on materials that are essential to production.
The potential impact goes beyond higher procurement costs. In the worst-case scenario, shortages could bring the production of entire industrial sectors to a standstill.
The risks do not concern only widely discussed materials such as lithium and rare earths. According to BCG, particularly significant vulnerabilities involve materials with relatively small global markets that are nevertheless indispensable for high-value industrial products.
Gallium is one example. BCG estimates that the entire global gallium market is worth less than $350 million per year, while products dependent on the material have an estimated value of $3.5 trillion. Gallium is used in high-performance semiconductors, communications technology and components for artificial intelligence.
Sources: Handelsblatt.