Hype v Economics

Scary

The element gallium is in very short supply and the world may well run out of it in just a few years. Indium is threatened too, says Armin Reller, a materials chemist at Germany’s University of Augsburg. He estimates that our planet’s stock of indium will last no more than another decade.

Not so scary [ArsTechnica]

One of the arguments trotted out in most posts focuses on the fact that the price of Indium has risen from around $95 in 2002 to over $1000 in 2006. What these posts fail to point out is that it was around $180 in 2000, so $95 appears to have been carefully chosen as a starting point. The end point is pretty suspicious as well, given that Indium's price was around $665 in May. Meanwhile, everyone fails to point out that the price of Gallium has remained flat in recent years.

To understand why the supply side has not increased production substantially with this increase in price, you have to look at how Indium is produced. Indium is extracted from raw materials mainly as a by-product of Zinc production. Because the price of Zinc has not increased recently, and may decrease in the near future, producers have little incentive to increase output.

Let's try to keep our heads, Internet.