By Noel John and Ashitha Shivaprasad

July 22 (Reuters) - Indium prices in the West jumped to two-decade highs in July, spurred by China's tightening grip on exports and a strong demand outlook for the metal.

• Indium prices on the spot physical market traded between $820-$850 per kilogram outside China, the highest since 2006 according to LSEG data.

• China accounts for nearly 70% of global indium refinery production.

• Industry sources expect demand for indium to remain healthy, underpinned by the metal's role in AI infrastructure, solar energy, laser technologies, photonics and defense systems.

• Indium is a byproduct of zinc production.

• China has recently stepped up scrutiny over exports of indium. Beijing added indium phosphide to its export control list in February 2025.

• "Non-Chinese producers are primarily sold out on contract, leaving less material available for the spot market," said Katie Clayton, Ferrous Value Chain analyst at CRU.

• Chinese unwrought indium exports dropped more than 70% to 15,004 kilograms in May compared with 53,638 kilograms in the same month last year, as per customs data.

• "China has a history of stockpiling indium based on its use in advanced consumer electronics and may be looking to build stock to meet expected increasing demand," said SP Angel analyst John Meyer.

• Meanwhile, UK semiconductor wafer maker IQE IQE.L on Tuesday said demand for its indium phosphide solutions accelerated in the first half of 2026 and would remain strong through the rest of the year.