Dan Deng: Inflating germanium metal price hurting long term demand

Asian Metal: Firstly, could you tell us a little bit more about your company and how you are involved in the germanium market?

Dan: Photonic Sense was established in 2003 and since then we have become one of the leading suppliers of germanium and silicon components for infrared optics applications. Our 3,600 square meter production facility offers advanced capabilities for growing large monocrystals and our state-of-the art CNC driven manufacturing processes generate optical blanks of highest quality and precision.

Asian Metal: There is a lot of talk at the moment regarding fibre optic and infrared markets slowing down over the last several months. Is this a view that you share?

Dan: The defence segments in IR-optics have clearly slowed down over the last couple of years, whilst the commercial IR-optics segments continue to grow. However, IR-optics components used in commercial applications are typically smaller than those used in defence applications. Therefore the growth in commercial applications has not offset the falling demand in defence applications.

Asian Metal: Despite demand across the board being reported to have depreciated by circa 20%, prices have witnessed further increases. What are your thoughts on this?

Dan: The germanium material market is dominated by just a few Chinese producers. These producers obviously have formed a cartel with the aim to drive the price up. Besides this, the Fanya Metal Exchange bought Germanium for very high prices and stock them which props up the market. This has resulted therefore in an artificially inflated price level that is by no means reflective of the market’s true demand.

Asian Metal: There is a lot of talk currently of substitutes and reformulations being explored due to the extremely high cost. Is this the case with your company?

Dan: Yes, it is clear that the high germanium price is encouraging systems engineers to look for alternative materials and to restrict the use of germanium to a minimum. Yes, we are working on some projects that look to reduce the amount of germanium metal used.

Asian Metal: Could you tell us a little bit more about these alternatives and products that are effectively lessening the need for germanium metal?

Dan: Alternative materials, for example chalcogenide glasses, are known and have been around for a long time. Due to improved quality and the increasing cost advantage they are becoming more and more popular.

Asian Metal: Are you of the opinion therefore that germanium will be effectively eliminated from these applications?

Dan: No, I do not think so. Germanium is the best and most effective element in these applications. However while price remains so inflated I do believe that exploration in other alternatives will be underway. What I expect therefore is the dependency to decrease and the need lessen, but I cannot see it being completely removed.

Asian Metal: What are your expectations of the market moving forward?

Dan: There will always be a market for germanium for infrared optics applications. However, we do not expect the demand to bounce back quickly but rather expect the market to keep slow in the near future. We expect a stable market and a stable but far too high price.

Asian Metal: Thank you very much Dan for taking the time to speak with us. We wish you all the best for Photonic Sense.