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US trade representative Jamieson Greer said on Wednesday April 22 that Washington expects partner countries to pay what he described as a “national security premium” to reduce reliance on Chinese supply, as the Trump administration pushes for closer coordination among like‑minded economies on critical minerals.“There is a premium we pay, and I call it the national security premium, and we will all pay a national security premium to have a secure supply chain,” Greer told the Financial Times. When allies raise concerns about higher costs, Greer said, they are focusing on cost efficiency – the very mindset he argued that has left Western economies exposed to supply concentration in the first place.Market participants said, however, that while the idea of a security premium is gaining political traction, its translation into sustained pricing power remains uncertain.
Xiao Han, a research analyst at Project Blue, said there is an increasing price gap between Western markets and China, especially for critical minerals like germanium and tungsten, with international prices much higher than Chinese domestic prices.Take germanium as an example; Fastmarkets assessments highlight a wide price gap between markets. As of April 17, germanium 99.999% Ge, in-whs Rotterdam prices were assessed at $8,000-10,000 per kg, compared with germanium 99.999% Ge min, in-whs China at 13,000-18,000 yuan ($1,900-2,600) per kg, which is around three to five times lower than the price in Europe.On a like-for-like WO3 basis, international tungsten concentrate prices are materially higher than domestic Chinese levels, being 30-40% higher. Fastmarkets’ assessment of Tungsten concentrate 65% WO3, in-whs China was priced at 880,000-935,000 yuan ($129,000-137,000) per tonne on April 15 and that of Tungsten concentrate, basis 50-70% WO3, spot price, cif global at $2,700-2,800 per mtu WO3 in the same week.
Han said the price gap was not taking the form of a single, stable markup, however. Instead, it reflected a widening and volatile price gap driven by price decoupling following China’s export controls. Higher prices outside China, she said, were being driven by supply shortages rather than a greater willingness among Western buyers to pay for national security.
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Skepticism over the sustainability of a “premium” is also shared by producers outside China. Raj Surendran, chief executive of Tianqi Lithium Energy Australia (TLEA), said the call for a national security premium reflected genuine concerns around geopolitical risk, supply concentration, carbon intensity and security of supply – but warned that markets rarely sustain higher prices without enforcement.“Historically, markets do not sustain higher prices without enforcement mechanisms,” Surendran said. “Once a sufficient compliant supply exists, prices gravitate back toward the lowest‑cost curve.”Compared with tungsten and germanium, lithium offers a more mixed picture, however.
Fastmarkets’ daily price assessment for lithium carbonate, 99.5% Li2CO3 min, battery grade, spot price range, exw domestic China, was 173,460-176,460 yuan ($25,376-25,815) per tonne on Thursday April 23, in comparison with Fastmarkets’ daily price assessment of lithium carbonate 99.5% Li2CO3 min, battery grade, spot prices cif China, Japan & Korea at $20.00-21.00 per kg (about $20,000-21,000 per tonne).Fastmarkets’ daily price assessment for lithium hydroxide monohydrate LiOH.H2O 56.5% LiOH min, battery grade, spot price range, exw domestic China, was 150,000-160,000 yuan ($21,944-$23,407) per tonne on Thursday April 23, in comparison with Fastmarkets’ price assessment of lithium hydroxide monohydrate LiOH.H2O 56.5% LiOH min, battery grade, spot price cif China, Japan & Korea, at $18.50-23.00 per kg ($18,500-23,000 per tonne), leaving the two ranges broadly overlapping.While the assessments are on different delivery terms, the data suggests lithium has not consistently developed the kind of wide, persistent cross‑market price gap seen in minerals such as germanium and tungsten.“There’s not much price divergence in lithium salt between China’s domestic and the overseas markets,” a China-based trader source said, “and sometimes China’s prices are even higher.”
With rising production capacity of lithium salt out of China in the last two years, a large amount of material is emerging in the spot market, but the sluggish demand for new energy vehicles has dampened buying appetite of overseas downstream, leaving these units finding their only way out to be China – the world’s largest lithium consumer.“We’ve noticed some overseas cargoes were offered at a discount to sell to the Chinese market, which is somehow regarded as a pool to absorb these ‘exceeded’ feedstocks,” according to a second Chinese trader source.
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The data suggests the current price differences between China and the West are less likely a “premium” added for national security concerns but more like a sharp and persistent price gap between markets that are increasingly pricing on the basis of different fundamentals, with Chinese and Western buyers clearing at very different levels.As a result, markets risk splitting into two parallel pricing systems, Han said: lower prices inside China shaped largely by domestic supply and demand and structurally higher “security prices” in Western markets influenced by geopolitics and the pace of new capacity development.Surendran cautioned, however, that whether such a split can be sustained over the long term remains uncertain. “A durable two‑price ecosystem – with a permanent China price alongside a higher, non‑China price – was unlikely without continuing intervention,” he said. “China remains structurally the lowest‑cost refiner, and that reality has not changed and is unlikely to change for the foreseeable future.”Surendran acknowledged that consumer behavior has evolved, with buyers placing greater value on optionality, security of supply and delivery certainty than in previous years. These factors, he said, are increasingly shaping contracting structures, logistics decisions and supplier selection. But they do not automatically reset underlying economics.“Resilience and geopolitics will shape access and risk,” he said. “But price is still anchored in economics.”
From the perspective of Chinese producers, the national security premium has sparked worries about losing foreign customers. Some participants in the market have tested whether their buyers are willing to pay this additional cost.According to a tungsten producer from Ganzhou, overseas customers have not expressed much interest in accepting an obvious security premium so far.“At the moment, our clients haven’t raised this idea with us,” the producer said. “Unless the US follows up with binding legislation, buyers will still source where prices are lowest as long as it’s legal.”These responses highlight the gap between policy ambition and market behavior.
While talk of a national security premium is reshaping procurement priorities and risk assessment across critical minerals markets, participants said its long‑term durability will depend on whether policy intervention can materially alter cost structures – rather than simply segment markets along geopolitical lines.
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