Unless you are a hobbyist or technician who solders things on a regular basis, your only acquaintance with the metallic element bismuth is probably through Pepto Bismol, the main ingredient of which is bismuth subsalicylate, a pinkish substance sold, not surprisingly, under the name of pink bismuth.
The fact that you can ingest pink bismuth and it will soothe your stomach should tell you something about its toxicity; it’s quite low. And, that’s why bismuth is favored over lead for soldering. It is now widely used for soldering of circuit boards and other electronic equipment, lens production for high precision equipment, alloys with low melting points (for example, in automatic sprinklers to activate them when fire breaks out) and, of course, pharmaceuticals.
All of those products are at risk as supplies of bismuth have dwindled. Those of you who read my pieces regularly can almost surely guess who is holding those supplies back. It’s China. Bismuth is one of five metals on which China placed strict export limits back in February. Now those restrictions are beginning to bite.
Early this year the price of bismuth shot up from $6 per pound to $40 per pound in Europe and $55 per pound in the United States. The price has since eased and is now being quoted at $17.50 per pound in Europe. That’s still three times above the price earlier in the year.
Why does China have so much market power? China controls 80 percent of the bismuth supply in the world. Bismuth metal exports from China have plunged more than 93 percent since the restrictions were put in place.
The United States is especially vulnerable. It stopped producing bismuth domestically in 1997.
The trouble with mineral deposits is that they are not evenly distributed across the globe. That truism have been brought into focus by this year’s export restrictions imposed by China which has an embarrassment of riches when it comes to critical metals. The old neoliberal idea is that it does not matter where commodities and manufactured products are extracted or produced. Trade will allow the most efficient producers to supply the world…that is, until those producers decide not to for political reasons.
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That is the emerging new world trade order, the arrival of which the Trump administration has hastened through its aggressive tariff policy, but one which was already coming into view before the current administration took office. We know this because China has reduced exports of critical materials before. And, the United States has for over a decade restricted export of advanced technologies to China, a strategy which the Biden administration built on after the first Trump administration embraced it.
Well, it turns out it does matter where commodities and manufactured goods come from. If they come from a country you are increasingly at odds with, you better figure out how to become less dependent by finding other sources or developing your own, preferably before you get cut off.
PS. I know that the United States and China have just agreed to further ease trade tensions in a notoriously vague agreement—the details of which have yet to be released—that appears to allow increased shipments of critical minerals. But in the murky, zigzag world of Trump administration trade policy, we should not be quick to judge the content nor the longevity of such an agreement. In any case, the long-term problem of China’s domination of critical metals markets and its ability to cut off supplies whenever it wishes will not be solved.
By Kurt Cobb via Resource Insights
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