Voices're High for Launching Rare Earth Futures

Following the launch of the coking coal futures, the voice of the industry on the introduction of rare earth futures trading is getting high. Analysts said it may be difficult to meet the requirement of the futures contract for Standardization, due to its various classification of rare earth products.

It is understood that, as a rare resource, our reserves of rare earths accounted for about 23% of the world's total reserves. After years of efforts, China has become the world's largest country of rare earth production, application and export. Nevertheless, China's rare earth enterprises still don't have the pricing power in negotiations with foreign buyers.

In recent years, with the increasing intensity of the rare earth mining of foreign countries, which reduce their dependence on China's rare earth export to some extent, the domestic rare earth prices immediately plunged into a decline. According to the data released, the annual average price of rare earth in China fell by about 40% in 2012, which closed to being "cut", and the average market price of dysprosium oxide and terbium oxide suffered declines of 40% and 46.6% respectively.

                  

What deserves our attention is that the decline of domestic rare earth price is difficult to stop. Analyzing from an official statistics from Baotou city, we learn that the domestic price of some rare earth products will still falling.

In view of this, after four months' halts of production, China's largest rare earth producer - Baotou Steel Rare Earth recover its production. Following it are two other great producer of rare earth, who resumed their production also. Even though, most of other producers are still on the sidelines.

With the gradual resumption of production of rare earth producers, the strategic pruchase and storage occurs to producers again. Recentlly, Yan Chunhua, the deputies to the National People's Congress, suggested that our country should do purchase and storage on rare earth industries with reasonable price on the basis of mining demand.

In fact, as early as in 2011, when the prices of rare earth suffered from sudden rises and drops, producers had already put forward the function of rare earth futures to maintain the stability of rare earth market.

Even so, analysts still have some doubts on the launch of rare earth futures.


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