May 8 (Reuters) - Indium prices soared this month to

their highest levels in nearly nine years as a surge in demand

for the metal used to make touch screens for mobile phones

triggered a rally reinforced by concerns about shortages.

According to traders, indium prices on the

spot physical market averaged around $345 per kilogram outside

China in early May, the highest since July 2015, compared with

$244 per kg in March.

Robust demand coinciding with planned maintenance at Teck

Cominco's operation in Canada expected through the second

quarter, and a lack of raw material for processing into zinc and

byproduct indium, has led to soaring prices, the traders said.

The indium price jump has highlighted scarcity of supplies

outside China.

WHY IS INDIUM IMPORTANT?

Indium is used in television and computer screens. It is

largely used in flat panel display units in the form of indium

tin oxide (ITO), and in fiber-optic technology in the form of

indium phosphide (InP).

KEY QUOTES

"Indium is seeing increased demand from consumers who are

suddenly getting concerned that they might not get supply in the

future," a trader said.

"I have been involved with indium for over 20 years and I

have never seen the market so dependent on China," another

trader added.

CONTEXT

China is the world's largest producer of indium. Data from

U.S. Geological Survey (USGS) shows Chinese supplies at 650 tons

last year comprised 65% of global supplies.

According to data provider Trade Data Monitor (TDM), China's

indium exports jumped 78% to 57 tons in March, after three

months of falling shipments.

However, China's March exports were 53% below those in the

same month last year, TDM data showed.

Additionally, zinc prices in London rose nearly 20%

last month, driven by tightness in raw material supplies.