Rare almost certain defeat in international litigation

If oil is the God-given gift of the Middle East , China is undoubtedly rare gifts received . But recently heard of the World Trade Organization (WTO) dispute settlement mechanism panel ruled that the interim report of the results , but for this " gift " cast a haze.

China has been a year and a half finally came news of rare international litigation , allegedly WTO dispute settlement mechanism expert support for the U.S. , Japan and the EU against Chinese rare earth export restrictions policy violations aspirations. Although the final report also require 1-2 months of time before the Foreign officially open , and the Ministry of Commerce , Ministry of Industry and the China Association of rare earth management departments and industry organizations were not confirmed to the outside , but on the 4th afternoon, the rare earth industry analyst economic Herald reporter on the edge Binbin said, " according to information at our disposal , in this country is indeed lost a lawsuit . "

After losing the right side is about to produce a great impact on the rare earth industry , while it is rare earth industry this year in the capital market of wind and water. Lost, bring in the end is the "disaster " or " consolidation opportunities " ?

Aggravate plight of the industry

Binbin in the side view, rare defeat in international litigation , means that China will be forced to the existing policy of rare earth export quota of rare earth export tariffs to be adjusted , " China's rare earth export controls may have to end . "

March 2012 , the United States , Japan and the EU has three trade disputes brought to the WTO claims that China against 17 ​​kinds of rare earths and tungsten, molybdenum export quotas and export duties and other restrictive measures imposed . After fruitless bilateral consultations , in September 2012 , set up by the WTO Director-General panel to adjudicate . Prior to 2011 , WTO had ruled China for bauxite, coke , magnesium and other 9 kinds of restrictions on exports of raw materials policy violation of WTO rules .

"Previously , China's rare earth industry has been a resource to earn by selling foreign exchange earnings , hence the ' cabbage price ' situation. Meanwhile, driven by profit , resulting in excessive export chaos . Based on this situation, the relevant state agencies to find ways to control and eventually taken to develop rare earth export quotas and other administrative means . "So , while Binbin that, once the elimination of export quotas of rare earth prices will once again be affected.

" may also appear again over- exploitation of resources , destruction of the environment , excessive export of such phenomena . A simple example , in the future , a large order of foreign rare earth in China is bound to cause intense competition between enterprises , triggering a price war , which will also result in the loss of low-cost domestic resources . Especially in the current environment, China's rare earth industry has not been fundamentally improved internal circumstances, forced open the industry is bound to exacerbate difficulties. " Edge Binbin said.

At present, China's rare earth industry's profitability situation is not optimistic. Data show that from January to August this year , China's rare earth mining and smelting industry realized main business income of 45 billion yuan , down 14.9 percent ; realized profits of only 3.2 billion yuan , down 62.1% ; rare earth products import and export trade $ 1.4 billion , down 39.4 percent .

It is reported that , in the face of international litigation unfavorable situation , management has been considered more flexible and rational policies instead of across the board, dogged terminal control , such as stress the importance of market allocation of ways to improve the role of mandatory production plan , through fiscal transfer payments rare earth resources to compensate reduction from the source to illegal mining of rare earth resources , overcapacity of power.

"As far as we know, a lot of long-term demand for rare earths are thinking of buying pushed back orders, once the export quotas , they will have a lot of bargaining space and objects , the price will be lower than it is now . " Edge Binbin representation .


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