Rare earth export quotas or canceled, excess capacity is the true risk

March 26 , WTO announced the United States, European Union, Japan against China rare earth, tungsten, molybdenum export management measures related to the case of the panel report , ruled that the export control measures Chinese products involved violations. This means that China 's export quota management system over the years , or will be forced to cancel.

Face is likely to be canceled rare earth export quota management system , China 's rare earth companies ready yet ?

" According to regulations, upon receipt of the expert group report , there is a right of appeal , the appellate body will make a ruling within three months, within 60 days, so now is not the final case , the expert group is currently being studied law to make analysis to decide whether to appeal. " Deputy Director of the Department of Treaty and Law Department of Commerce Yang Guohua said .

Once abolish restrictions of rare earth export quota management , release of rare earth supply , get the current quota of rare earth enterprises is bound to increase competition , China's rare earth will it return to the " loess price" touting the situation?

May increase competition for enterprises, rare earth products on various parameters indicators refinement requirements of different enterprises targeted products , in addition to even cancel the export quota constraint management system , as well as export qualification , product quality and other aspects , so customers not because of little interest to change the procurement object.

"Sheng and resources at the Ministry of Commerce issued the first batch of rare earth export quotas this year , access to more than 600 tons of export quotas , prices remained stable and the industry average . For effects may want to cancel the export quota management system of the enterprise , which depends on the specific customer relationships , not simply judge. "These Sheng and resources secretaries said.

In addition, he also said that the country 's rare earth industry in 2012 and 2013 are not completely finished using export quotas.

Statistics show that the total 2013 export quota of 24,000 tons of rare earth (equivalent to the physical volume of 31,000 tons ) , the annual quota of rare earth products actual physical volume of exports 22,900 tons , an increase of 36.3% , exports amounted $ 603 million .

Wikipedia information on the rare earth industry analyst Du Baichuan , told reporters that due to the recent downturn in the rare earth downstream demand , the export volume has been far below the actual export quotas, export quotas practical significance has little importance is gradually reduced.

Du Baichuan also said that the light rare earths worldwide are abundant, and more scarce heavy rare earth , Chinese light rare earth exports proper release is possible , should focus on the protection of the heavy rare earths . Moreover, even if forced to cancel the export quotas , customs can also increase the limit ; Meanwhile, the domestic regulation of rare earth enterprises have gradually improved, such as the current national authorities to implement the rare earth industry, invoices, certificates of rare earth mineral rights management and other measures.

Need to speed up the integration of rare earth

Whether the WTO ruling will be appealed , deputy secretary general of China Rare Earth Industry Association陈占恒said the reporter , is currently in the analysis phase of the panel report , comments , " In the absence of full interpretation, complete analysis, published not mature, but will soon be concluded . "

However, industry analysts believe that the possibility of changing the ruling is unlikely.

CPPCC National Committee, China Academy of Engineering , president of the China Rare Earth Industry Association Gan Yong early March , said in an interview , "and the WTO rare earths very grim situation facing lawsuit , WTO has given us the right to appeal , but from the results, there is almost a role in delaying the execution time . "

But the WTO panel report released the same day , the aluminum Rare Ltd. in Sichuan Liangshan , Sichuan Dechang proclaimed , Chinalco 's rare earth industry consolidation platform - China Rare Earth Rare led Leshan Sheng and RE shareholder Representative corporation , utilization of Mineral Resources Chinese Academy of Geological Sciences Institute , Institute of Rare Earth new Materials Co., Ltd., Sichuan Han Xin Mining development Co. , DeChangXian owned Assets Management Co. , Ltd. and other signed agreements.

Ministry of Industry and Information Technology Division inspectors raw materials , rare earth JiaYinSong Office on the day of the meeting , said Chinalco Sichuan State Council meeting clearly lead the integration of rare earth enterprises, RE integration and the formation of working group set up six large deviation must not be allowed rare premise enterprise group .

The real risk

"In fact, the rare earth industry is currently in oversupply situation , downstream demand has weakened rare earth , rare earth prices have been low, even if the elimination of export quota management system , companies bidding space is small, the worry is not the key to the bid . " Du Baichuan told reporters.

He said that the main problem is the rare earth smelting industry overcapacity and a separate set of mining, production, circulation , smuggling as one of the chain of black interests have not been eliminated , and the resulting decline in prices of rare earth products , rare serious business losses .

Reporter finishing discovered , in the rare earth group responsible for the integration of several major companies, its performance last year are not ideal. Rising Nonferrous which the reporting period, operating income of about 1.6 billion , down 32.77% : net loss of 109 million , up 365 percent fell sharply .

The report analyzes revenue up colored Rising rare earth and related products decreased by 802.71 million yuan , of which the rare earth industry revenue down by 365.46 million yuan , rare earth and related products trading business revenue decreased by 437.25 million yuan ( of which export revenue up reducing the 310.87 million yuan ) .

Baotou Steel Rare Earth last year while operating income decreased by 8.33% to 8.47 billion yuan , net profit also fell , edged down 0.11 percent year on year to 1.44 billion yuan ; Annual Sheng and resources in 2013 , the company net profit of about 146 million yuan last year , fell 5.24 percent .

Many industry insiders believe that the current problem is the price of rare earth industry downturn , weak demand , high inventories , due Luancailuanwa still exists , is difficult to count the number of specific stocks . But look at the typical price of rare earth products , such as the price of lanthanum oxide in 2011 more than 30,000 yuan a tonne, the highest ever reached 250,000 yuan , but currently only 20,000 yuan / ton.

Overcapacity and price slump is currently facing a number of challenges rare earth enterprises , and the integration of a large group of rare earth has been slow , perhaps the elimination of export quota system , allowing the export of rare earth return to the market will bring these companies a way out.


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