American control of rare earth market VS game again weigh on prices

United States Geological Survey (USGS) Mineral Resources Program Director Minot, said recently that the U.S. government has started searching and testing rock mine plan, Geological Survey and the Department of Energy has sent geologists to explore the country, from the western United States each has abandoned gravel Yellow Gold mines and ore samples were collected for testing.

It is noteworthy that, following the end of 2010 the United States since the resumption of production of rare earth minerals, the U.S. government plans to start again rare find. Meanwhile, the U.S. House of Representatives Rules Committee passed the "2013 National Strategic and Critical Minerals Production Act Act" (hereinafter referred to as the "Act") for consideration and discussion of the General Assembly submitted to the House of Representatives, hoping to speed up domestic strategic mineral resources exploitation, reduce dependence on Chinese rare earth resources.

"The U.S. Congress passed a bill reforming the introduction of rare-earth strategy, and launched a search in the local rare earth elements within the action, intended to pressure the Chinese government, from the current supply and demand pattern of rare earth to stand." 25, the Chinese Academy of Social Sciences Institute of American Studies deputy director, the Herald Commentator Ni Feng accepts Economic Herald reporter said.

The high cost of mining and milling

It is understood that, according to the "bill" in the exploitation of strategic mineral resources companies to submit an application, the United States approving departments must be made within 30 months of approval not to be unreasonably delaying approval. The debate in the House Rules Committee, the "Act" proponent U.S. House of Representatives, Mr Modi Delaware Republican lawmakers said the bill put forward is based on national security considerations and economic recovery, there are nearly 60 members signed support the bill.

Notably, the United States currently has 19 kinds of non-fuel minerals entirely dependent on foreign imports, the demand for more than 50% dependent on imports of non-fuel minerals up to 24 species, including a variety of rare earth elements. Meanwhile, in 25 major mineral countries, the U.S. authorities for approval mine exploitation license for the longest time, the "Act" implementation will undoubtedly change this situation.

"United States to expand domestic rare earth mining is mainly due to national security concerns, after all Earlier data show that Chinese monopoly over 95 percent of the global supply of rare earth rare earth is an indispensable strategic resource, U.S. export restrictions in China after growing recognition to the importance of rare earth resources, relying solely on cheap imports from China Rare Earth has become the past, the need to develop their strategic reserves. "Ni Feng expressed, rare earth new materials are often used in military and other fields, the dominant control of rare earth resources right to help the United States for technological development of the industry ahead of the layout.

"The other is for commercial reasons because of China's rare earth export quotas to take such control measures, led the international rare earth price fluctuations, the U.S. downstream production enterprises greater impact, so in the rare earth market, the United States hopes to regain voice pricing This is also in line with its recently has been advocating 'energy independence' policy. "Ni Feng concluded that U.S. domestic rare earth strategy to restart economic and strategic significance has double value.

At the same time, the Herald reporter noted, there are a considerable part of the U.S. Democratic lawmakers on the "Act" expressed doubts, saying that if the bill is likely to accelerate approval of the environmental damage, while the high cost of mining and refining complex issues are also constrained production of rare earth industry one of the reasons.

"From the bill proposed in the House of Representatives Committee on Rules to get through this process, the United States on Chinese rare earth export management approach does not eliminate concerns to military enterprises, represented by the continuing pressure from interest groups." Ni Feng expressed , although the "Act" is still unknown whether the final implementation, but it is undoubtedly the release of rare earth dependence on China to get rid of this signal. For quell discontent considerations, the U.S. Democratic Party and the Obama administration on the issue of rare earth in China will put more pressure on China to relax Rare management measures.

Sustained export control

The 25th Shandong Provincial Commission by letter of rare earth raw materials industries at Herald office acceptable to the Director Liu told reporters that, for the protection of resources and environmental considerations recent years, China's rare earth mining and export of rare earth products taken a series of strict control measures , for now this trend will continue.

According to reports, in order to change the draining away of rare earth resources, environmental damage severe embarrassment, since 2003, China's official export quotas for rare earths, rare earths in 2005 abolished the export tax rebate, and compress the number of firms export quotas. To 2006, the Ministry stopped issuing permits mining of rare earth, rare earth production in 2007 began to implement mandatory planning, and reduce exports of rare earths; 2008 release of "National Mineral Resources Plan" provides that to 2015, China's rare earth years mined about 140,000 tons in total control; early 2011, China's export volume of rare earth has announced 40% reduction compared to previous years.

Herald reporter access to the Ministry of Commerce recently released 2013 second batch (of 24) of rare earth export quotas notice found that China's rare earth export quota in 2013 totaled 31,001 tons, compared to the 2012 export quota is not significantly increased.

Shandong Peng Industrial Co., Ltd. of Shandong of only two rare earth export quota export enterprises, which in 2013 the second batch of rare earth export quota of rare earths and heavy rare earth light, respectively 378 tons and 40 tons, 2013 compared to the first batch of rare earth export quota 422 tons and 48 tons of export scale, reducing the amplitude can be described as obvious.

Shandong Peng Industrial Co., Ltd. Sales manager surnamed Zhang told the Herald reporter, the company's production capacity of rare earth products is much higher than export quotas, if we increase the number of quotas, enterprises can digest. According to reports, the company's rare earth products are mainly exported to the United States, Japan and other countries, a smaller proportion of the domestic market, with the implementation of the quota system, how to develop the domestic market becomes increasingly important.

Vicki put pressure on prices

In recent years, as China's strict control of rare earth export quotas, soaring international price of rare earth, rare earth minerals from the earth to the product, the price is almost available "surge" to describe. In May 2011 the State Council issued "on the promotion of sustained and healthy development of rare earth industry a number of opinions", the Chinese rare earth prices soaring again, the rate of increase compared to 2008 was more than 500% year international CCIEE rare earth index also rose nearly five-fold .

"The U.S. strategy to restart domestic rare earth still in its infancy, even if recovery mining, the scale is not too large, its real purpose is to make the international market high rare earth prices down." Ni Feng admitted that import substitution domestic rare earth mining premise yes, one exporting country without too many restrictions on the export of rare earth, the second is the relative domestic import prices lower mining costs, when the two can not be met, the United States hoping to restart the local strategic low rare earth market price.

Herald reporter noted, China's rare earth export quota system implementation and start trying to control exports of rare earths, a series of initiatives to restrict exports of rare earths once let the United States, Japan and other big consumer of rare earths is extremely dissatisfied, and even to China labeled as "resource nationalism" in hats, it is precisely because in recent years, China's rare earth export quota management and control, making the international rare earth prices rose gradually developed enough to attract interest from other countries and contributed to competition, the United States and Japan and other big consumer of rare earths was turned teamed find an alternative to China Rare Earth Source.

It is understood that the U.S. Pentagon and the Japanese Toyota worked with two Canadian mining companies --- Ucore Rare Metals Co., Ltd. and Matamec exploration companies to develop rare earth mine in North America; At the same time, when he was Japanese Foreign Minister Genba Koichiro has also continuously Meets with Kazakhstan and other Central Asian countries, five foreign ministers promised to give financial support to those countries by way of joint venture plant to develop these former Soviet Union country of rich rare earth mineral resources.

Herald reporter noted that it is affected, in 2011 China's rare earth export quota for the physical volume of 30,000 tons, the actual exported only 18,600 tons, which means that 40% of the rare earth quotas are not used.

Spread downstream industries

Rare earth prices soared sharply also spread to the domestic application of rare earth enterprises, due to unbearable high raw material prices, some companies have to start looking for alternatives, even at the low end back ferrite era.

It is understood that the 2012 annual operating rate of rare earth downstream applications vendors was as little as one to two percent, the number of enterprises remained at the edge of collapse. 2013 second quarter, although the application of rare earth enterprises operating rate improved to five to 60 per cent but the shadow of soaring raw material prices plunge allow enterprises to have been low inventory of strategies to deal with risks. More than industry experts said the dramatic changes in the price of rare earth serious blow to the development of downstream industries, a large number of alternative technologies enable new applications of rare earth died, and even lead to technical regress.

In addition, the domestic demand for downstream applications enterprises is not high, coupled with limited export quotas, and ultimately spread to the upstream rare earth raw materials market. Herald reporter noted that through continued downward, rare earth prices have fallen to pre-boom levels, while a large number of rare earth piled in the warehouse can not find buyers situation.

Affected by this, the first half of this year, the rare earth-related poor performance of listed companies. In Baotou Steel Rare Earth (600,111), for example, in the first quarter net profit of 245,262,900 yuan, down 79.68%; Minmetals Rare Earth (000,831) expects first half net profit of about 9 million -1500 million yuan, down 92.50% -95.50 %. Leading enterprise application providers downstream Zhong Ke San Huan (000,970) in the first half profit of 138 million -2.30 million, down 50% -70%.


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