Hafnium Price Going After the Record

Source: Adobe Stock/ phaisarnwong2517

A restricted supply combined with growing demand: The price of the technology metal hafnium has been rising strongly since the beginning of 2022.

Hafnium is getting more and more expensive. Since the beginning of 2022, the price in Euro has increased by 111%. Growing demand in several industrial sectors, such as aviation, gas turbine manufacturing and the semiconductor industry, is driving this development.

Crucial Raw Material for the Industry

Aircraft manufacturers such as Airbus expect an increase in orders over the next two years, according to the German business magazine Manager Magazin. Now that the market for short-haul aircraft has recovered from the effects of the Covid19 pandemic in air traffic, new orders for wide-body aircraft are on the horizon. As such, hafnium is essential for aircraft construction. As an alloying addition combined with niobium, tantalum and molybdenum, it gives aircraft turbines high strength, temperature stability and corrosion resistance. These high demands on the material also apply to the production of gas turbines. Manufacturers are also processing hafnium-based superalloys. According to market forecasts by management consultants McKinsey, the semiconductor industry, which is growing by up to 8 percent each year, requires hafnium to produce ever faster and smaller computer chips. Purchase volumes for the metal are likely to rise.

Future Demand May Exceed Production Volumes

According to the industry website Argus Media, global hafnium production amounts to a maximum of 75 tons. This is little compared to other technology metals such as gallium or indium, which are available at 700 and 1,000 tons per year, respectively. Hafnium is linked to the mining of zirconium and is expensive to extract. For every ton of hafnium, 50 tons of zirconium are required. Therefore, mining volumes cannot be scaled arbitrarily. Given the physical scarcity, which meets increasing demand, supply bottlenecks cannot be ruled out. The EU has, therefore, added the technology metal to the list of critical raw materials in 2017. Analysts believe that competition for the raw material could intensify further in the coming years. Argus Media even calls hafnium an underestimated metal that doesn’t receive the same attention given to other metals and battery materials: “Especially because the market is small, but that doesn’t mean it’s any less strategic.”