Hafnium: The Current Market Situation of the Technology Metal

The price of hafnium has risen almost constantly over the past two years or so, at times significantly. However, after reaching a record high in October, a price correction is emerging. Still, demand for the raw material remains steady. *

 Is the price trend for hafnium about to reverse? After remaining relatively stable for years, the price of the metal has risen unusually sharply since the beginning of 2022. In October 2023, it matched its previous peak due to increased demand in the aviation industry, among others. Currently, the supply of the raw material is severely limited, and production is concentrated in just a few countries. However, the upward price trend now appears to have come to an end. The price is falling somewhat but remains high. If you’re wondering why, read on.

More Suppliers Are Stimulating the Market

Commodities markets are complex. In general, prices of strategic metals such as hafnium are volatile, as they’re influenced by numerous factors such as economic and political developments. Frank Meier and Jan Giese, technology metals experts at the raw materials supplier TRADIUM, described the causes of these price fluctuations in an interview at the beginning of the year.

Meier said the increased number of suppliers of hafnium for certain forms of processing could have led to an oversupply of individual materials and the recent fall in the price of the metal. At the same time, the aircraft industry, a significant hafnium consumer, has been looking ahead by covering its raw material requirements for the coming year through contracts. Meanwhile, demand for semiconductors, for applications such as computer chips, continues to increase, Meier continues. As a result, the demand for hafnium is now over 100 tons, compared to 60 to 70 tons in previous years.

What Might Stimulate the Hafnium Market in 2024?

Even though hafnium prices are declining from their historic high, the demand for the metal — classified as a critical raw material by both the European Union and the USA — remains strong.

Why? Since the beginning of 2022, the aviation industry has been recovering from the consequences of the coronavirus pandemic, and aircraft manufacturers’ order books are full. The situation hasn’t changed much this year, and the consulting firm Deloitte expects the same in 2024. For example, civil aviation is likely to benefit from the catch-up effect following the Covid-19 lockdowns. The International Air Transport Association IATA expects 2023 passenger traffic revenue to increase by twelve percent in 2024, to USD 717 billion. On the other hand, Deloitte forecasts the military sector will also grow due to increasing geopolitical uncertainty. The procurement of raw materials, especially critical minerals, poses a particular challenge for the industry, the report continues, referring to the highly locally concentrated production of many resources.

Nuclear energy, where hafnium is used in the control rods in reactors, is also likely to provide an impetus for hafnium pricing in 2024 and beyond. At the World Climate Summit in Dubai in December, more than 20 countries signed a declaration aimed at tripling nuclear power generation by 2050. The signatory states include the United States, Japan, France, and the United Kingdom.

Last but not least, the semiconductor industry could also ensure an increase in demand. Hafnium tetrachloride is used as a coating for the next generation of tiny computer chips.

The French company Framatome has recently responded to the growing demand for hafnium. At the beginning of December, it announced investments aimed at expanding the production of high-quality hafnium and zirconium alloys. France is the most important country of origin for hafnium, accounting for 49% of global production.

The extent to which these developments will affect hafnium prices in 2024 will become apparent in the coming weeks and months.

The industry specialist TRADIUM will continue to keep all those interested in the topic up to date with price charts and provide regular information on new developments in the commodities market.

* In this article, we refer to the development of the hafnium price in US dollars, the leading international currency on the commodity markets.