Soochow Securities has released a research report indicating a preference for resource recycling leaders that possess advantages in raw material channels, purification technology, qualification barriers, and downstream clients. The growth of the AI metal recycling industry is not simply about capacity expansion, but rather hinges on the ability to "source materials effectively, extract them efficiently, sell them profitably, and maintain strong compliance."
On the raw material front, companies need to secure stable access to high-grade materials such as electronic scrap, industrial catalysts, and precious metal-bearing waste liquids and residues. On the technology front, capabilities in complex material separation, multi-metal co-recycling, and high-purity refining are essential. On the qualification front, hazardous waste management permits, environmental compliance, and production safety constitute the industry's entry barriers. On the client front, those whose downstream coverage includes high-end manufacturing sectors like semiconductors and electronic materials can more directly benefit from the dividends of demand expansion.
AI Demand Explosion Reshapes the Value of Small Metals Across Three Dimensions
The evolution of AI hardware towards high power, high speed, and high density is reshaping the value of AI small metals through three dimensions: irreplaceable demand, rigid supply, and strategic scarcity. First, regarding irreplaceable demand: although the unit usage of elements like indium, bismuth telluride, and ruthenium is small (at the gram level), they critically impact the performance of optical interconnects, thermal control, and storage media, with demand elasticity directly driven by computing hardware. Second, recycling represents a key increment: supply is generally constrained by primary ore endowments, as these metals are mostly by-products of copper, zinc, and molybdenum smelting, meaning the scale of base metal smelting determines the supply ceiling, making recycling a crucial additional source. Third, strategic scarcity: most of these varieties have been included in export controls or strategic mineral catalogs, with primary channels locked by both resource endowment and policy, leaving marginal supply increasingly dependent on the expansion of the recycling system.
Bismuth/Tellurium: Core to Computing Thermal Control, Bismuth Telluride Secures Key Role in AI Thermal Management
On the supply side, neither bismuth nor tellurium has independent mineral deposits. The supply ceiling is locked by copper, zinc, and molybdenum smelting and electrolytic copper production, with China's refined output accounting for approximately 86% and 80% of global totals, respectively. On the demand side, bismuth telluride is the core thermoelectric material for TECs in AI servers and optical modules, with CdTe thin-film photovoltaics accounting for about 70% of tellurium demand and thermoelectric applications about 15%. The evolution of optical modules towards 1.6T/3.2T is driving demand growth. Strategically, since February 2025, China has implemented dual-use item controls on high-purity bismuth and full supply chain export controls on tellurium.
Indium: InP Substrates Determine the Value of AI Optical Communications
On the supply side, indium is a purely associated metal, with the supply ceiling set by the scale of zinc smelting. Global refined indium production is approximately 1,100 tonnes per year, with China accounting for about 70%. On the demand side, pure indium is used to produce indium phosphide substrates, a core material for high-speed optical chips. The upgrade of optical modules from 800G to 1.6T/3.2T is driving a multiplier effect on InP demand. Strategically, indium itself is not controlled; rather, the three compounds InP, TMI, and TEI are subject to controls. High-end InP substrates are dominated by Japan's Sumitomo, the US's AXT, and Japan's JX, which together hold approximately 80-90% market share, while Chinese manufacturers still hold a low share.
Platinum Group Metals: Hidden Materials for Storage and Passive Components
On the supply side, China's primary ore endowment is weak, with annual primary production of only about 3 tonnes and annual recycled volume of approximately 31 tonnes, nearly ten times the primary output. Global reserves stand at about 76,000 tonnes, with South Africa accounting for roughly 83%. On the demand side, ruthenium is used in storage chip sputtering targets and advanced process interconnects, while palladium is used in MLCC pastes. AI storage and passive component demand indirectly drives platinum group metal usage. Strategically, platinum group metals are not on the control list, but China consumes over 30% of global supply and is a long-term net importer, with platinum imports of about 104 tonnes and palladium about 28 tonnes in 2024, leaving raw materials dependent on South Africa and Russia.
Antimony: Dual Drivers from Flame Retardants and Semiconductor Doping
On the supply side, high-quality standalone mines are depleting, with incremental supply shifting towards gold-antimony co-occurring deposits and recycled recovery. In 2025, global antimony mine production is about 110,000 tonnes, with China producing approximately 40,000 tonnes, accounting for 36%, while China, Russia, and Tajikistan together account for about 86%. On the demand side, global antimony consumption in 2024 was approximately 166,000 tonnes, up 10.8% year-on-year. Flame retardants account for about 44% and photovoltaic glass about 30%, while flame retardants for AI server PCBs and housings, along with high-purity doping for semiconductors, constitute structural incremental demand. Strategically, antimony ranks among the top in strategic importance within small metals. In 2024, the Ministry of Commerce implemented export licensing management on antimony and periodically tightened exports to the US. Following trade consultations in November 2025, related arrangements were temporarily deferred until November 2026.
Rhenium: A Metal Driven by Both Aerospace and Computing Infrastructure
On the supply side, rhenium has no independent deposits and is mainly derived as a by-product of copper and molybdenum smelting. Globally, the primary source is molybdenum concentrate roasting flue dust, while China relies more on extracting rhenium from copper smelting waste acid. In 2025, global production is about 81 tonnes, with China producing roughly 20 tonnes, accounting for about 25% and ranking second globally. Reserves are only about 2,500 tonnes, with Chile holding 52%. On the demand side, nickel-based superalloys for aerospace applications, particularly engine turbine blades, represent the primary demand for rhenium with no substitute. The surging power consumption of AI data centers is driving demand for gas turbine blades, which also require rhenium, and it is additionally used in high-temperature heating components of MOCVD equipment. Strategically, there is no specific control on rhenium, but supply is highly concentrated in Chile and China.
Risk Warning
Risks include AI hardware demand falling short of expectations, metal price fluctuations, recycled raw material acquisition underperforming expectations, export controls and industrial policy changes, and risks related to capacity release and technology validation falling short of expectations.