Analysis of China's Rare Earth Imports Landscape in November

Chinese rare earth imports are mainly rare earth ores, and the two main suppliers are Myanmar and the US. However, future imports from the U.S. may grow more slowly. China imported 13,300 tons of rare-earth metal ore in November and 71,500 tons from January to November 2021, of which 71,300 tons, or 99% of the total, were imported from the US. The growth of rare-earth metal ore imports from the US has declined from 67% in 2019 to 11% in 2021 as production at the MP mine is approaching full capacity.

Looking at the import structure of rare-earth ores from Myanmar, it shows a clear trend of decreasing total imports, decreasing the proportion of concentrates, and increasing rare-earth ores. China imported 1,471 tons of unlisted REO in November and 18,000 tons from January to November 2021, of which 15,600 tons were imported from Myanmar. And its share of total rare earth imports rose from 75% in 2018 to 87% in 2021.

In November, China imported 282 metric tons of mixed rare earth carbonates. This compares with 4,348 mt imported from January to November 2021, of which 647 mt were imported from Myanmar. 85% of Chinese total imports of mixed rare-earth carbonates were imported from Myanmar in 2018, a proportion that drops to only 15% in 2021.

Myanmar's import of rare-earth mines experienced huge fluctuations in 2021, with overseas mining projects under the spotlight. The Myanmar Ministry of Health said on December 27 that four cases of omicron were found in Myanmar, followed by news that the border between China and Myanmar has been closed again since the last closure lasted until July-November 2021.

Some domestic companies are pessimistic about the reopening of the China-Myanmar border next year. As a result, the latest batch of rare-earth ore imports from Myanmar is expected to be held firm by traders. Some separation companies have been actively looking for alternatives to medium and heavy rare-earth ores, and the potential demand for chlorinated rare earths will be strong. Africa is rich in monazite mineral resources, with relative mining projects located in Zambia, Morocco, Tanzania, Nigeria, etc. Chlorinated rare earths recovered from monazite may become a new growth engine for rare-earth ore supply.

Chinese rare-earth exports are mainly NdFeB permanent magnets, followed by oxides and metals of non-permanent magnet elements such as lanthanum, cerium, and yttrium. November's rare earth permanent magnet exports were 4,156 metric tons, down 0.5% from the previous month. With the approach of Christmas, overseas markets entered a seasonal low and demand weakened.

The export volume of Chinese NdFeB permanent magnets to Europe dropped the most in November, while the growth was mainly contributed by the US. Among them, the export volume of permanent magnets to Europe was 1462 tons in November, which was 17% lower than the previous month; the export volume to Southeast Asia was 641 tons, which was the same as October; the export volume to the US was 668 tons, which was 37% higher than the previous month.

China's REO exports are mainly yttrium oxide, lanthanum oxide, and cerium oxide. The main destination for lanthanum oxide is the United States, which is mainly used as a petroleum cracking catalyst. Yttrium oxide is mainly exported to Japan. Many manufacturers have built up inventories in advance due to concerns about the impact of the Winter Olympics. And the yttrium oxide market is likely to see a seasonally slow season for overseas markets after New Year's Day. The export volume of yttrium oxide is expected to decrease in January 2022.

The domestic light rare-earth ore mining quota is expanded in 2021, and the production capacity of some domestic separation enterprises using light rare-earth ore as the main raw material grows accordingly. At the same time, the Baotou meeting proposed to solve the problem of excess capacity of lanthanum and cerium products through exports. It is expected that the export of light rare earth elements such as lanthanum and cerium oxide will increase in 2022.

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