The confidence shown to it by global gallium consumers, even before production begins at its new unit in mid-2027, is signaled by Metlen’s second major deal and the fact that it “locked in” another buyer even though the price for the critical metal is moving at even higher levels than those in effect during the first agreement last July.
At a time when gallium is racing to the staggering heights of $3,350 per kilo, the Greek group yesterday announced the pre-sale of 16% of its future annual production to a major Japanese chemicals company - the confidentiality agreement does not allow its identity to be disclosed - with the "price" factor apparently not acting as a deterrent.
Breaking one record after another, this is about $150 higher than the already high $3,200 of last summer, when it entered into the first deal with an American technology giant (for 25% of production), an indication, as analysts say, of the capability that global players in the sector see in Metlen.
In essence, and although the prices of this critical metal are breaking one record after another, the company managed within three months to sell 41% of its projected annual production, an indication that the venture is being crowned with success, as it is winning the trust of an extremely difficult and demanding market.
And this, without production of germanium and scandium having yet started, as well as copper, zinc, and tin oxides, which are to be produced from 2027 onward on the new industrial line of Aluminium of Greece.
The fact that even now, with prices at such heights, international buyers are rushing to lock in quantities, leads management to expect that “the total planned production of 50 MT annually will have been sold for several years, well before production starts (scheduled for Q3 2027)” at the new €200 million unit in Aspra Spitia, Boeotia, concerning an integrated bauxite, alumina and gallium complex.
The arithmetic of the deals
Doing the arithmetic of this second deal, analysts, such as Morgan Stanley, comment that beyond reducing the risk regarding the commercial placement of production before operations begin, the financial figures for the Critical & Rare Metals sector are shaping up much higher than those presented at the Capital Markets Day in London in April 2025.
At that time, the bar for expected operating profits from this specific segment had been set very low, specifically at €40 million.
According to the American house, using Argus’ benchmark of $3,350/kg as a basis, selling the entire production on terms similar to those of the spot market translates into EBITDA of about €140 million, that is three times more than the indicative figure presented in London.
Taking into account the subsequent agreements that will also be announced, it is estimated that from gallium alone, more than 50% of the forecast for EBITDA of €260 million will have been covered from the entire Critical & Rare Metals sector with a horizon of 2028.
It naturally does not go unnoticed that the second major gallium agreement also does not concern a European customer.
As for why European interest is absent, although the investment was initially designed to cover the needs of the Old Continent, the answer had been given last July by Ev. Mytilineos himself during the European Metals ceremony, where he had handed over the helm of the body to his successor.
In first place in demand and orders received by the group, as he had then said, is Japan. In second, the US, in third, South Korea, with Europe occupying only 4th place.
“And this is because gallium is unfortunately used in very advanced technological applications, for which Europe does not have the corresponding industry. We started making the investment to cover Europe’s needs. But we may not have European customers”, the head of Metlen had then said.