What Is Tellurium
Tellurium is element 52 — a brittle, silver-white metalloid (an element with properties between a metal and a non-metal) so rare in the earth's crust that it is eight times less abundant than gold and rarer than the rare earth elements themselves. Its symbol Te comes from the Latin tellus, meaning earth. It was discovered in 1783 in a gold mine in Transylvania by a mining inspector who initially believed he had found bismuth or antimony. It is not found in concentrated deposits of its own. Like indium, tellurium does not have a mine. It exists in trace quantities in copper ore — typically at concentrations of 0.01–0.05% — and is recovered from anode slimes (the solid residue that accumulates at the bottom of electrolytic copper refining tanks during the copper purification process). Approximately 95% of global tellurium output comes from this single recovery pathway.
The dominant modern use — approximately 60% of global tellurium consumption — is CdTe solar cells (cadmium telluride — a semiconductor compound formed from cadmium and tellurium that converts sunlight to electricity with high efficiency at lower manufacturing cost than conventional silicon). CdTe thin-film solar panels are the technology platform of First Solar, headquartered in Tempe, Arizona — the world's largest thin-film photovoltaic manufacturer and the only US-based solar panel company operating at global scale. Every First Solar panel contains tellurium. As First Solar expands — and it is expanding aggressively under the Inflation Reduction Act — tellurium demand grows with it.
Beyond solar: tellurium is used in thermoelectric devices (materials that convert heat directly to electricity, or use electricity to create temperature differentials for cooling — applied in precision temperature control, waste heat recovery, and specialty electronics), in metallurgical alloys that improve the machinability of steel and copper, and in specialty semiconductors and infrared optics.
The rarity is absolute. Global tellurium production runs at only a few hundred tonnes per year — making it one of the scarcest industrially significant elements on earth. Like indium, tellurium's production cannot respond to its own price signals because it is permanently coupled to copper refining volumes, which are driven by copper demand.
Plain English
Tellurium is what makes First Solar's panels work. It is rarer than gold, extracted only as a byproduct of copper refining, and produced in only a few hundred tonnes per year globally. The solar buildout is growing demand. The supply cannot grow on demand — it can only grow when more copper is refined. China controls most of the refining. The US is trying to build domestic supply. The gap between those two facts is the story.
Where It Comes From
China dominates tellurium supply with the same structural logic as indium — dominant copper refining capacity plus higher tellurium content in Chinese copper ores produces structural supply concentration. China accounts for approximately 60–65% of global refined tellurium output. The dominance is reinforced by the same export control framework: China's export licensing requirements apply to tellurium alongside gallium, germanium, and indium, adding an administrative layer on top of structural supply concentration.
Outside China, meaningful tellurium production occurs in Japan, Russia, Canada, Belgium, Peru, and the United States. Russia's copper anode slime exports — previously a significant non-Chinese source — have been disrupted by sanctions since 2022. Peru proposed a 15% export tax on tellurium intermediates, removing additional non-Chinese supply from accessible markets. The combination of Russian disruption, Peruvian export friction, and Chinese export licensing has removed approximately 18% of non-Chinese supply from global markets since January 2023.
The most strategically significant development in Western tellurium supply is Rio Tinto's Kennecott tellurium recovery plant in Utah — one of only two US tellurium production operations. Built in 2022, the facility recovers approximately 20 tonnes of tellurium per year from the anode slimes produced at the Kennecott copper mine. First Solar has a direct supply agreement with Kennecott, and the facility represents the US government's clearest example of a domestically secured critical mineral supply link in the clean energy chain.
Twenty tonnes per year. First Solar alone requires several hundred tonnes annually to sustain and grow its manufacturing capacity. The domestic supply answer exists. It covers a fraction of the domestic demand.
The byproduct constraint defines the ceiling on any response. More Kennecott tellurium requires more Kennecott copper refining. More US tellurium supply requires more US copper refining — an industry that is itself supply-constrained and capital-intensive. The loop is closed. You cannot build a tellurium supply chain independently of a copper refining expansion.
Plain English
China refines most of the world's copper and captures most of the tellurium. Russia's supply is sanctioned. Peru's supply faces export taxes. The US answer is Kennecott — 20 tonnes a year. First Solar needs hundreds. The gap is structural and cannot be closed by building a tellurium facility alone — it requires building more copper refining first.
Why It Matters Right Now
The demand story is anchored by one company and one technology. First Solar is the world's largest thin-film solar manufacturer, operating entirely on CdTe technology — and First Solar is growing. The Inflation Reduction Act's domestic manufacturing incentives have driven First Solar to expand US production capacity aggressively, with new factories in Ohio and Alabama and planned expansions toward 25 gigawatts or more of annual US manufacturing capacity. Every gigawatt of CdTe capacity requires approximately 70–100 tonnes of tellurium at current panel specifications. At 25 gigawatts, the tellurium requirement for First Solar alone dwarfs current US domestic production by an order of magnitude.
Beyond First Solar: global CdTe solar installations are expanding as the technology matures and cost curves continue declining. The IEA projects CdTe to retain and grow its share of utility-scale solar installations through the 2030s, particularly in high-temperature environments where CdTe outperforms silicon — silicon solar panels lose efficiency as temperatures rise; CdTe is more tolerant of heat, giving it a genuine performance advantage in hot climates and high-irradiance applications.
Thermoelectric applications add a second demand stream. As waste heat recovery becomes an industrial priority — particularly in data centers, where managing heat is a significant operational cost — thermoelectric devices that convert heat to electricity gain commercial relevance. Tellurium-based thermoelectrics are among the highest-efficiency materials available for this application, and data center scale is a meaningful new demand pull.
The supply picture is unchanged from what it has always been: structurally capped byproduct production from copper refining, concentrated in China, subject to export licensing, with limited Western alternatives at small scale. Supply is growing modestly — approximately in line with copper refining growth globally — but not at the rate that CdTe solar expansion demands.
Plain English
First Solar is the story. It is the world's largest thin-film solar manufacturer, it runs on tellurium, and it is expanding aggressively under the IRA. US domestic tellurium supply covers a fraction of what First Solar alone needs. China controls most of the rest. The export licensing applies. Demand is growing faster than supply can follow.
The Solar Bet America Made
Here is the strategic contradiction at the center of the tellurium market: the United States has made a deliberate, well-reasoned bet on CdTe thin-film solar as part of its clean energy transition. Through the Inflation Reduction Act's manufacturing incentives, through DOE support for First Solar's domestic expansion, through the Kennecott tellurium recovery investment, the US has chosen to back a solar technology it can lead — one developed by an American company, manufactured in American factories, competitive with Chinese silicon solar on utility-scale cost economics.
The strategic logic is sound. CdTe is a US-led technology. First Solar is the only major solar manufacturer in the world not Chinese-owned. The IRA incentives are designed to build a domestic clean energy manufacturing base that China does not control. The choice of CdTe over silicon solar is partly an industrial policy choice — backing the technology pathway that gives the US a competitive advantage.
CdTe requires tellurium. China controls 60–65% of global refined tellurium supply. The export licensing regime applies. Kennecott produces 20 tonnes per year. The DOE's own analysis acknowledges that CdTe solar growth will require tellurium supply that current domestic production cannot meet. The policy response has been to invest in recovery efficiency at existing copper refiners, negotiate supply agreements like the Kennecott-First Solar arrangement, and explore tellurium recycling from end-of-life solar panels — a pathway that is technically feasible, commercially nascent, and years from operating at meaningful scale.
The technology bet is strategically correct. The supply chain logic is unresolved. The US chose the solar technology it can win with — and it depends on the material China controls.
Plain English
The US chose CdTe solar because it is American-led and competes directly with Chinese silicon panels. CdTe runs on tellurium. China controls most of the tellurium. The US domestic answer — Kennecott — is real and operational and insufficient. The technology bet is right. The supply chain has not caught up with it.
What the Price Has Done
Through most of the period from 2015 to 2019, tellurium traded in the $40–80 per kilogram range — adequate supply from Chinese copper refining meeting modest CdTe solar demand when First Solar's manufacturing capacity was smaller and global installations were lower. The supply was sufficient. The price reflected it.
The structural shift began gradually. CdTe solar expanded. First Solar grew. Russian anode slime exports were disrupted by sanctions after 2022. Peruvian export taxes added friction. China's export licensing framework, applied to tellurium alongside gallium, germanium, and indium, arrived as part of the coordinated August 2023 critical minerals control package. Each of these events removed or constrained a portion of non-Chinese supply while demand continued growing.
From approximately $128 per kilogram at the start of 2022, tellurium climbed steadily through 2023 and 2024. The 2024 annual gain was approximately 89.77% from the start-of-year level as the combination of export licensing, Russian supply disruption, Peruvian export friction, and IRA-driven First Solar expansion created a sustained supply-demand imbalance. The global price reached approximately $109 per kilogram by end of 2024.
The fourth quarter of 2025 delivered a concentrated move: prices rose approximately 28.2% in a single quarter — from approximately $82 per kilogram to approximately $105 per kilogram by December — as photovoltaic manufacturing demand accelerated and the structural supply constraints showed no sign of easing.
May 2026: the SMM domestic China benchmark sits at approximately $107.55 per kilogram. Western retail stands at approximately $243.30 per kilogram. The domestic-to-retail gap — $107 versus $243 — reflects the export licence access premium plus dealer margin, the same two-tier structure seen across China-controlled critical minerals. Year to date in 2026, the Western retail price is up approximately 10.79% from the January open. Since the start of 2025, up approximately 66.70%. Since the start of 2024, up approximately 89.77%.
The price has nearly doubled in two years. The structural drivers — First Solar expansion, constrained non-Chinese supply, China's export licensing — are not reversing.
Plain English
Cheap for decades when CdTe solar was small. Then First Solar's expansion and China's export licensing created a sustained upward trend. Up nearly 90% since the start of 2024. A 28% surge in a single quarter at end of 2025. The domestic China price and Western retail are separated by a 2x gap — the export licence premium plus dealer margin. The direction is clear and the structural drivers are not reversing.
The Bottom Line
The tellurium supply problem and the indium supply problem share a structural spine: both are byproduct metals permanently coupled to a different industry's production cycle, both cannot respond to their own price signals, and both are subject to China's export licensing regime. The supply logic is the same. The demand story is different and more concentrated.
Tellurium's demand is anchored by one technology and, in the United States, by one company. First Solar is the world's largest CdTe manufacturer, it is expanding aggressively under the IRA, and it runs on tellurium. That concentration makes the tellurium supply problem both more tractable and more acute than indium — more tractable because there is a named company with named supply agreements actively working to solve it; more acute because First Solar's expansion ambitions require tellurium volumes that dwarf current Western production.
The US government has made the right call in supporting Kennecott and backing First Solar's domestic manufacturing expansion. The logic is sound — CdTe is a US-led technology that competes directly with Chinese silicon solar on utility-scale cost economics, and securing its supply chain is a legitimate industrial policy objective. The gap between that correct strategic logic and the physical reality of tellurium supply is what the price is reflecting.
China controls 60–65% of global refined tellurium production. The export licensing regime applies. Kennecott produces 20 tonnes per year. First Solar needs multiples of that. The technology bet is right. The supply chain is not yet built to match it.
Plain English
The US chose the right solar technology — one that doesn't depend on Chinese silicon manufacturing. It depends on tellurium instead. China controls most of the tellurium. The US domestic answer is Kennecott — real, operational, and insufficient at current scale. The price is up 90% since the start of 2024. The expansion of CdTe solar is pulling demand up faster than copper refining can generate supply. The gap between the policy ambition and the physical supply chain is the story.
Pricing data: SMM domestic China tellurium 5N 99.999% in-warehouse, confirmed via TradingEconomics tellurium CFD (April 7, 2026, 780 CNY/kg converted); IMARC Group tellurium pricing report (March 2026); Western retail Strategic Metals Invest (April 24, 2026). Supply data: USGS Mineral Commodity Summaries 2026; Metal Tech News / Rio Tinto Kennecott tellurium plant data. Demand data: Strategic Metals Invest tellurium supply outlook (2026); First Solar manufacturing expansion data; IEA Critical Minerals Outlook. Export control context: China export licensing framework (applied to tellurium alongside gallium, germanium, indium). As of May 2026.