US buyers of critical minerals successfully bypass China’s Export Ban.

Unusually large quantities of antimony – a metal used in batteries, chips and flame retardants – have poured into the United States from Thailand and Mexico since China barred U.S. shipments last year, according to customs and shipping records, which show at least one Chinese-owned company is involved in the trade. While, China dominates the supply of antimony as well as gallium and germanium, used in semiconductors, telecommunications, and military technology, has banned exports of these minerals to the U.S. on December 3 following Washington’s crackdown on China’s chip sector.

The resulting shift in trade flows underscores the scramble for critical minerals and China’s struggle to enforce its curbs as it vies with the U.S. for economic, military and technological supremacy.

Specifically, trade data illustrate a re-routing of U.S. shipments via third countries – an issue Chinese officials have acknowledged. Three industry experts corroborated that assessment, including two executives at two U.S. companies who told Reuters they had obtained restricted minerals from China in recent months.

The U.S. imported 3,834 metric tons of antimony oxides from Thailand and Mexico between December and April, U.S. customs data show. That was more than the previous three years combined. Thailand and Mexico, meanwhile, shot into the top three export markets for Chinese antimony this year, according to Chinese customs data through May. Neither made the top 10 in 2023, the last full year before Beijing restricted exports. It is mention worthy that Thailand and Mexico each have a single antimony smelter, according to consultancy RFC Ambrian, and the later’s only reopened in April. Neither country mines meaningful quantities of the metal.

U.S. imports of antimony, gallium and germanium this year are on track to equal or exceed levels before the ban, albeit at higher prices.

Ram Ben Tzion, co-founder and CEO of digital shipment-vetting platform Publican, said that while there was clear evidence of transhipment, trade data didn’t enable the identification of companies involved.

“It’s a pattern that we’re seeing and that pattern is consistent”, he told Reporters. Chinese companies, he added, were “super creative in bypassing regulations”.

China’s Commerce Ministry said in May that unspecified overseas entities had “colluded with domestic lawbreakers” to evade its export restrictions, and that stopping such activity was essential to national security. The U.S. Commerce Department, Thailand’s commerce ministry and Mexico’s economy ministry didn’t respond to similar questions.

In the meanwhile, U.S. law doesn’t bar American buyers from purchasing Chinese-origin antimony, gallium or germanium. Chinese firms can ship the minerals to countries other than the U.S. if they have a license.

Levi Parker, CEO and founder of U.S. based Gallant Metals, disclosed to media personnel how he obtains about 200 kg of gallium a month from China, without identifying the parties involved due to the potential repercussions. At First, buying agents in China obtain material from producers. Then, a shipping company routes the packages, re-labelled variously as iron, zinc or art supplies, via another Asian country, he said. The workarounds aren’t perfect, nor cheap, Parker said. He said he would like to import 500 kg regularly but big shipments risked drawing scrutiny, and Chinese logistics firms were “very careful” because of the risks.

BRISK TRADE –

Thai Unipet Industries, a Thailand-based subsidiary of Chinese antimony producer Youngsun Chemicals, has been doing brisk trade with the U.S. in recent months, previously unreported shipping records reviewed by Reuters show. Unipet have shipped at least 3,366 tons of antimony products from Thailand to the U.S. between December and May, according to 36 bills of lading recorded by trade platforms ImportYeti and Export Genius. That was around 27 times the volume Unipet shipped in the same period a year earlier.

The records list the cargo, parties involved, and ports of origin and receipt, but not necessarily the origin of the raw material. They don’t indicate specific evidence of transhipment.

The buyer of Unipet’s U.S. shipments was Texas-based Youngsun & Essen, which before Beijing’s ban imported most of its antimony trioxide from Youngsun Chemicals. Neither Youngsun & Essen nor its president, Jimmy Song, responded to questions about the imports.

China launched a campaign in May against the transhipment and smuggling of critical minerals.

Offenders can face fines and bans on future exports. Serious cases can also be treated as smuggling, and result in jail terms of more than five years, James Hsiao, a Hong Kong-based local partner at law firm White & Case, has informed the Press. The laws apply to Chinese firms even where transactions take place abroad, he said. In cases of transhipment, Chinese authorities can prosecute sellers that fail to conduct sufficient due diligence to determine the end user, Hsiao added.

Team Maverick