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Follow on Google News | China Set to Define Future Market for Rare Earth MetalsInvestor focus shifted east this week as market speculators made it known that they believe China will boost rare earth output to take advantage of potential near-term price rises.
By: molyinvestingnews Its rare earth industry has an output capacity of approximately 200,000 tons, Chen Zhanheng, a researcher at the Chinese Society of Rare Earths, wrote in a commentary last year. According to the Ministry of Commerce, Chinese exports were 49 percent of the government-allotted quota in the first eleven months of last year as a result of a slowing global economy sapping demand. “Export quotas may be met this year as overseas demand recovers,” said Wang Caifeng, a former official overseeing the rare earth industry with the Ministry of Industry and Information Technology, in an interview last week. Signs of this ramp up were evident this week when Jiangxi Copper Co. , China’s largest producer of the industrial metal, announced that it planned to accelerate development of rare earth at a project in the Southwestern Sichuan province to meet export demand. “Output of rare earth oxide at the Mianning mine will eventually reach 50,000 metric tons a year,” said Chairman Li Yihuang, without providing a set timeframe. “When the project is completed, Jiangxi Copper will be among the country’s three largest rare earth producers.” Despite moves such as these from industry giants, uncertainty within certain factions of the investment community remains. This speculation stems from data compiled by Shanghai SteelHome, which shows that rare earth prices tumbled last year as consumers reduced overall use. The average price of lanthanum oxide, a rare earth used in rechargeable batteries and refining catalysts, was $20,500 a ton in the fourth quarter of last year – a dip of 15 percent on third quarter figures. Not quite a done deal While China dominated headlines, a Japanese news source was left red faced when it released a report stating that the Japan-China friendship association Okinawa Prefecture had signed an agreement with its Chinese counterpart at Hohhot in Inner Mongolia under which both parties agreed to cooperate in businesses involving rare earth. An unnamed official in charge of the Chinese People’s Association for Friendship with Foreign Countries has since declared that these reports were false and that no agreement was ever signed. He went on to add that there was no mention of rare earth during the visit. The news agency has since issued an apology for the reports. Despite this incident, the Japanese government has announced plans to spend $65 million in subsidies over the next few years to assist Japanese companies in reducing their dependence on dysprosium and neodymium, while encouraging recycling and development of alternate materials. Commenting on the move, Kenichi Hasehira, an official at the Japanese ministry’s nonferrous metals division said: “After two years, we expect demand for dysprosium to be cut by about 200 metric tons and demand for neodymium by about 1,000 tons a year from this program.” Analysts suggested that moves such as this are occurring in response to China’s tight grip on the global rare earth market. Legislation under criticism China’s rare earth export quotas have come under increased criticism from the international community. The European Union (EU), Mexico, and the US have filed complaints with the World Trade Organization (WTO) stating that its pricing policies on raw materials, including magnesium and bauxite, violate international trade agreements. In 2011, Beijing imposed an export quota of 30,184 metric tonnes, marginally reduced from 30,258 metric tonnes in 2010. For 2012, based on analyst calculations, the country’s full-year quota may hit approximately 31,130 metric tonnes. The country underlined that it feels that export restrictions are necessary in order to maintain domestic demand and protect the environment. The WTO responded by stating that it considers the argument illegitimate and that China has been “unable to demonstrate” Michael Silver, CEO of American Elements, told media sources that the ruling “confirms the existence of the two-tiered price structure that has caused so much concern.” Visit http://www.bangoalloy.com/ Visit http://www.bangoalloy.com/ Visit http://www.bangoalloy.com/ # # # Bango Alloy Technologies Co., Ltd. was established in Oct.2001 with a Sino-foreign joint venture background. We specialize in manufacturing and processing high-density tungsten heavy alloy, tungsten copper alloy, tungsten carbide, tungsten silver and other tungsten related products, which are widely applied in medical equipments, machining industry, vehicle and other industrial field. We boast our exclusive sourcing channel, advanced manufacturing process, rigorous quality control system as well as technical support from first-class university. We employed MIM and pressing technique, which allow us manufacturing high-density heavy alloy products and the BIG parts for radiation shielding, aerospace parts and ammunition industry. End
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