China’s trade restrictions on key metals offer Western companies an opportunity to find alternatives

German chemicals and consumer goods giant Henkel said it had declared force majeure over China’s antimony export restrictions in August 2024, suspending deliveries of four types of adhesives and lubricants widely used by automakers, according to a letter to customers dated Nov. 8, 2024, seen by Reuters.

Henkel uses antimony in its Bonderite and Teroson branded products, key parts of its Adhesives Technologies division, which generated revenue of 10.79 billion euros ($11.4 billion) last year.

“We have notified our suppliers of a delay in the import of these raw materials pending approval by the Chinese government of license applications,” the letter from the German company to customers, seen by Reuters, signed by two senior executives, said. As a result, Henkel is declaring force majeure on its deliveries of these products, and the company is unable to predict how long this will last.

The letter from Henkel, seen by Reuters, and conversations by the agency 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 the Chinese government’s trade restrictions and highlight how Western players are struggling to replace supply chains from China.

Henkel, contacted by Reuters about the letter, said it was working to support its customers and find alternative supplies, adding that it was closely monitoring the global antimony supply situation and aiming to restore solutions to meet customer demands.

The price of antimony, a rare metal that is essential for military equipment such as ammunition, infrared missiles, nuclear weapons and night-vision goggles, has surged by about 230% this year to about $39,000 a metric tonne in the crowded Rotterdam spot market, according to market intelligence provider Argus.

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

Last year, China also imposed restrictions on exports of gallium and germanium — used in semiconductors, solar panels and weapons — as well as certain types of graphite — a key component in electric car batteries.

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