Impact of US Tariffs on Chinese Indium in the Indium Market

Potential US tariffs on Chinese indium could further increase prices in an already rising market, which is currently experiencing tight inventories and growing reliance on Chinese imports.

The Biden administration announced additional tariffs on various commodities last week, including a new 25% tariff on unwrought indium and indium powder. These Section 301 tariffs are to be implemented following a public comment period, prompting many to enter the market early to cover their needs.

Market participants surveyed by Argus expressed concerns that the tariffs would provide little benefit to the US market, which has minimal domestic production and is heavily reliant on imports. According to the US Geological Survey, the US relies on imports for 100% of its indium needs. Therefore, the proposed tariffs are viewed as an additional tax on the market rather than an effective protectionist policy.

These tariffs come at a time when US prices were already at their highest since May 2015, due to tight domestic inventories and increased dependence on elevated Chinese market prices. Argus-assessed 99.99% Chinese indium prices rose from $210-220/kg on May 23, 2023, to $370-390/kg on May 22, 2024.

Indium prices in the US increased from $210-230/kg on July 11, 2023, to $390-425/kg on May 21, 2024, coinciding with China being the largest producer and consumer of the material.

US suppliers viewed last year's price gains in China with skepticism, noting that the global market fundamentals did not support such movements. Market participants avoided Chinese metals by seeking producers in South Korea and Canada in 2023, but availability from these sources decreased throughout 2024.

This price skepticism led many US distributors and consumers to maintain inventory on an as-needed basis, expecting lower prices for most of 2023. Consequently, there was little availability within the US in 2024, leaving the market unprepared for further gains in Chinese prices since early April.

Tight domestic inventories and few alternative import sources drove increased reliance on Chinese indium. First-quarter indium imports from China to the US rose to 16 tons in 2024 from 3 tons in the first quarter of 2023. According to US Commerce Department data, the US imported 286 tons of indium in 2023.