China’s Ministry of Commerce said the sharp drop was due to the coronavirus impact and ‘trade business based on changes in international market demand and risk conditions’
Source: Asia Times Financial
(ATF) China’s rare earth exports fell sharply again in September – by nearly 44%, causing the United States to step up operations and enter a ‘state of emergency’.
China announced a huge drop-off in rare earth exports for September, while other figures show China is massively increasing production by huge numbers, so it is stockpiling rare earth resources.
According to the latest data released by the Chinese General Administration of Customs on October 13, China exported 2,003.3 tonnes of rare earths in September this year, a plunge of 43.8% from the same period last year (3,570 tonnes).
Data published previously, plus September’s figure (2,003.3 tonnes), show that China has exported a total of 26,019.4 tonnes of rare earths in the first nine months of this year.
China’s Ministry of Commerce said the sharp September drop was due to the impact of the coronavirus with rare earth downstream enterprises having slowed. Plus, “Chinese companies also carry out international trade business based on changes in international market demand and risk conditions.”
As the world’s most important rare earth seller and processor, with the world’s largest proven rare earth ores, any move by China in this area is obviously significant as rare earths are vital to high tech industries globally.
China’s ace card
Also around 80% of the rare earth products used in the United States need to be imported from China every year after processing.
In the tit-for-tat Sino US trade war rare earths are China’s ace card, while the US holds back technological products and imposes sanctions. With China now playing its ace card, exports of rare earths have fallen sharply this year, so the United States is stepping up its “self-sufficiency” in the field of rare earths.
Rare earth minerals are found in many places around the globe, but mining and processing them are especially noxious activities, which have been left largely for China to undertake for the last few decades. But Australia, the US, Ireland and Russia could begin increased mining and processing once environmental concerns are set aside.
‘US military control’
The US is putting rare earths under military control as a strategic move. But this process will take some time.
Chi Jianyi, director of the Baotou Rare Earth R&D Center at the Chinese Academy of Sciences, previously proposed in a Xinhua report that China should build a national rare earth resource utilisation and application development plan, based on mineral resources to ensure a balanced development of national strategic needs and the downstream application market of rare earths.
Aware of the importance of rare earth resources for a country’s technological and economic development, China has established a rare earth strategic reserve system since 2011.
After the implementation of nearly 10 years of purchasing and storage plans, coupled with rare earth production targets issued every year, the supply of rare earths is strictly controlled.
Under the “law of less quantity” this has meant higher prices, as China’s rare earth prices have also been effectively regulated.
Northern Rare Earths
Despite suffering coronavirus delays downstream, upstream things seem OK – the 2020 semi-annual report of Northern Rare Earths had a statement showing that the company’s controlling shareholder Baotou Steel (Group) Company has an exclusive mining right at the world’s largest rare earths mine – Baiyun Obo mine, and the exclusive right to rare earth products in Inner Mongolia.
The controlling shareholder uses the company as a platform to develop the rare earths industry and utilize rare earths resources. The company is the largest supplier of light rare earth products in China and even the world, and one of the six largest rare earth groups in China’s rare earths industry.
Even under the epidemic situation, Northern Rare Earths still achieved both revenue and profit growth in the first half of this year. It achieved revenue of 9.61 billion yuan, a year-on-year increase of 12.81%, and realised a net profit of 328 million yuan, a year-on-year increase of 23.36%.
Northern Rare Earths said the company’s per capita output of functional materials increased significantly from the previous year, and the output of rare earths smelting and separation products and rare earth functional materials rose.
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