Rare earth industry can not discard a "quota "

China has basically confirmed the preliminary WTO rare earth export restrictions violations , and this decision is a direct consequence of rare earth export quota system will be canceled and this is designed to protect resources and prevent indiscriminate system once disappeared, China 's cheap rare earth turn comeback , for the industry will be the fatal blow "feels just out of the trough of internal problems , we must face the blow . " RE traders from Guangdong Dongguan Zhiqiang told reporters that his recent experience. And this blow, from the WTO on Chinese rare earth export quota system preliminary ruling .

The media recently reported that has lasted a year and a half of foreign rare earth litigation outgoing message , WTO has basically confirmed the Chinese rare earth export restrictions violation notice to the relevant countries . In fact, the industry is not surprised by this result , but the result is really going to so when they felt the earth practitioners no small pressure.

In this regard, the deepest feelings is the first line of rare earth export traders . Liu Zhiqiang said that many long-term needs before foreign clients are considering delayed orders, because once the export quota was canceled , the customer's inquiry will increase choice and negotiate the price of rare earth space naturally becomes large. This allows Zhiqiang and his colleagues are beginning to worry about , just starting out the plight of the rare earth industry internal problems , it also suffered another outside the storm ? In this regard, some analysts believe that the preliminary results of the forthcoming, China's rare earth industry may not be entirely bad news.

"WTO losing almost a foregone conclusion , leaving no time for the government response expected by the market so long, it will instead be a quota system for rare earth industry Forced reasonable transformation. " CRE Securities researcher Peng Bo told reporters.


Quota system to prove safety
The reason why so rare practitioners are so terrified , because they are accompanied by 15-year export quota system is in jeopardy. It is understood that China has about 23% of the world 's rare earth reserves , but long-term supply more than 90% of global rare earth production. Previously few years, China has been in the export of rare earth export quota system perform , that is clearly a year of domestic manufacturing enterprises meet the relevant conditions of export volume and distribution companies , in order to protect resources and the environment and realize sustainable development.

But if the U.S. , EU and Japan in joint prosecution Chinese " undue restrictions on exports of rare earths " in favor of the issue , then China will have to make concessions on the issue of export quotas , and thus the earth tariffs, quotas fully liberalized , which may so once "cabbage price" of rare earth products comeback . Why other side of the United States and Japan of rare earth export restrictions so keep a close eye ? Is China 's rare earth export " demand" has touched a sensitive nerve of each other ?

Reporters learned from the China Rare Earth Industry Association , in fact , due to the global market demand for China 's rare earth dropped significantly in recent years China's rare earth export quota has never run out of Chinese rare earth export quota for the 2011 decline of 52.01% to 48.75% in 2012 .

" The aim of our foreign quota system , which has not export enough to use , but rather want to deal with the quota system is reasonable. " Ganzhou a rare business person in charge told reporters . Like many entrepreneurs, he and rare earth , rare earth might think is just the beginning , once the rare earth quotas fall, many resources sector would have been affected.

China International Economic and Trade Arbitration Commission (CIETAC) Mo Shijian told reporters , in some specific cases, WTO rules allow members to conduct export control , one of which is out of non-renewable natural resources protection. But Europe and the United States put forward , if indeed out of this consideration , China 's restrictive measures should also be applied to China 's domestic production, which is currently China's rare earth industry problems.

Peng Bo told reporters that China's rare earth industry, precisely because of the amount of private mining of rare earth rare earth even more than the quota of total control and global consumption , which makes the rare earth prices have been suppressed . To this end, in August of this year the Government has launched a crack down on excessive and indiscriminate digging earth for action on , and began to bear fruit , the rare earth prices have rebounded , to a certain extent, protect the rare earth resources. And the preliminary results of the WTO , and perhaps will be the efforts came to naught before .

In this regard, the Shanghai Metals Rare analyst Jiang Hanmei believe that allowing return of rare earth products cheap and China 's rare earth industry is currently undergoing consolidation, as well as China 's resource strategy are contrary . Therefore, China is bound to appeal on this issue , the game will continue, but the end result is likely to be both sides to make concessions.

"Buy kuroko eat "

What China 's rare earth serious private mining to what extent , that makes the quota system brought to the cusp ? Reporters from Ganzhou Rare Earth Group Qiandong learned that the current domestic rare earth separation smelting capacity has been severely surplus. Gong Bin, chairman of the group told the media that the current separation of the South ionic rare earth smelting capacity has exceeded 100,000 tons , and as the boss southern Jiangxi Rare Earth , in 2013 the first batch of production index was only 3950 tons . Indicators huge difference and capacity , making the "food" companies use a lot of rare earth separation kuroko to " eat ."

" hundreds of tons of plant capacity often only get a few dozen tons of targets, indicators and capacity difference of nearly 10 times . This is their capacity is simply an empty stomach . In order to prevent a large number of separate smelting capacity has been idle , buy black ore production has become a common phenomenon in the industry . "These Ganzhou Rare Earth company official told reporters .

This phenomenon has also been a trade association 's attention. According to the China Association of Deputy Secretary-General Chen Zhanheng earth , at present China 's actual annual production capacity of rare earth is 15 to 180,000 tons , while the global to the actual demand of 13 million tons, China 's demand of about 100,000 tons , of which the South separation smelting enterprises ion ore obtained more than 70% of unknown origin, ultra mandatory plan production is widespread. These " bounce guerrillas " is the Chinese rare earth industry a quota system was the "culprit ."

If the final result of the WTO's final ruling , as expected , to release the Chinese quota , then the consolidation is accelerating , " civil strife ," the Chinese rare earth industry, will undoubtedly be a new shock .

In Peng Bo opinion, then the domestic varieties might be interested in all the earth export quotas for relaxation . However, due to large reserves of light rare foreign and domestic light rare earth industry is also relatively mature , so the light rare earth quotas will be gradually liberalized the vanguard . In this regard, China Rare Earth Industry Association vice president Wang Qin also publicly said: "Cancel rare earth export quota management proposals first began to consider a lighter rare earths . "

The news that some engaged in light rare earth production and processing enterprises anxiety . " with China 's unique heavy rare earth different light rare earth reserves in the world have a rich , this is treated as if the quota released a pioneer in its export price may be volatile, resulting in many manufacturing enterprises are facing restructuring. " Liu Zhiqiang told reporters . But for the heavy rare earth products he was not worried , based on his past experience in the trade , even if the true abolition of export quotas and other regulatory tools , heavy rare earth prices should also be a return to the market , rather than return to the price of cabbage .

This view has been analysts agree. Jianghan Mei believes that rare earth export tariffs have been an important part of the cost . Exports of rare earths after the opening , with lower costs , China may increase overseas orders , when only 10% of the low tariffs or to squeeze many irregular light rare earth production enterprise production space . But if you want to eradicate irregularities within the industry , but also the introduction of new policies each response .

Use Regulation reasonable deal in fact , in the face of the WTO " bad " ruling that China was not unprepared .

As early as May 10, 2011 , the State Council issued " on the promotion of rare earth industry, the healthy development of a number of opinions", the Chinese around the rare earth resource development, smelting separation and circulation market order expand regulation by the Ministry of Industry and the formation of large rare earth industry group the program , currently the industry has formed a number of sets resource extraction, smelting separation processing and application technology research and development of rare earth industry in one large group .

But in Xiamen University, China Energy Economic Research Center Lin Boqiang view, the rare earth industry, small, scattered , chaotic situation has improved though , but with the original Chinese side hopes that the use of the time for appeal which had been expected to achieve the purpose of integrating the gap .

" This is due to related companies are often small and medium- rare local government tax ' bulk ', where , between enterprises , and even the rare earth industry between upstream and downstream have to stick to the benefit of local integration makes progress very difficult. Therefore, how to coordinate the relationship with the local government , is the key to integration of rare earth . " said Lin Boqiang .

He also worried that once the quota system release , in front of huge interest , China 's excessive and indiscriminate digging earth , illegal smuggling or re- export of such issues arise in the market .

To this end, Chen Zhanheng recommended by communicating with the WTO , the country may be the first of LREE classified management , such as light rare earth export management to some extent liberalized, but the heavy rare earth is still the implementation of conservation policies . Also play a role in the production market, mandatory plans ; establish RE purchasing and storage system , in order to mitigate the impact of WTO ruling . At the same time , how to more rational use of WTO rules also require rare earth industry "catch-up " one of the priorities .

Mo Shijian told reporters , WTO rules , while not supporting Member States restrict the export volume and set high tariffs behavior , but allows member states to manage exports through export qualification . If the earth through the formation of large enterprise groups , can contain rare earth Luancailuanwa , effective management of rare earth exports . Moreover, China 's rare earth industry in line with WTO majority requirement, but did not do the export quota and the number of domestic consumption to maintain consistency , so China under the framework of the WTO may request to retain the rare earth export quota , while the quota extended to domestic consumption consistent with levels.

"Perhaps in the long run , China's rare earth quotas certainly still will continue to suffer criticism. But stabbing outside must first be peace within , if they can be govern domestic rare earth industry in chaos , and then export management perfecting , Chinese rare earth export quota system to complete the transformation, so that no foreign country can handle grip . " Jianghan Mei expressed .


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