China losing leverage on Japan as rare earth metal exports decline

[AADHAAR]

China losing leverage on Japan as rare earth metal exports decline

China can potentially lose its diplomatic “card” when dealing with Japan due to its plummeting export of rare earth materials, the lowest in 10 years. Japan is the largest importer of China’s rare earth metals, accounting for 56 percent of the exports which it uses for cars and hi-tech gadgets.

China’s rare earth exports is expected to barely hit 10,000 tons in 2012, a far cry from its quota of 30,996 tons for this year. This might mean that it may no longer be able to use this advantage in dealing with Japan on bilateral issues, which include the current territorial spat over the Senkaku Islands. China’s exports were highest in 2003 with 74,000 tons but has gradually observed to decline. Last year, exports fell to 18,000 tons, less than half of its 2010 figures. China’s largest rare earths producer, Inner Mongolia Baotou Steel Rare-earth (Group) Hi-tech Co., has halted its production in an attempt to stabilize the market, according to a Chinese official.

While the global economic slowdown may have caused the gradual decline of rare earth exports, another, more immediate reason is the lessening demand for such resources in Japan. The country has started to research and develop alternative materials and recycling technology in order to minimize the effects of Chinese restrictions on exports like the one that was implemented by China in 2010 in response to an arrest made by Japan against a Chinese trawler captain. There have also been calls in China for even more restrictions in response to the current territorial dispute between the two countries.


China losing leverage on Japan as rare earth metal exports decline - The Japan Daily Press

 

[ahfatzia]

No big deal economically and politically. China should limit her rare earth exports and save them for future use that will ease environmental destruction.

 

[AADHAAR]

China rare earths producer suspends output

BEIJING (AP) — China's biggest rare earths producer has suspended production in an effort to shore up plunging prices of the materials used by makers of mobile phones and other high-tech products.

State-owned Baotou Steel Rare Earth (Group) Hi-tech Co. said in a statement released through the Shanghai Stock Exchange that it suspended production Tuesday to promote "healthy development" of rare earths prices. It gave no indication when production would resume and phone calls to the company on Thursday were not answered.

Beijing is tightening control over rare earths mining and exports to capture more of the profits that flow to Western makers of lightweight batteries and other products made of rare earths. China has about 30 percent of rare earths deposits but accounts for more than 90 percent of production.

Beijing alarmed global manufacturers by imposing export quotas in 2009. It also is trying to force Chinese rare earths miners and processors to consolidate into a handful of government-controlled groups.

Baotou Steel Rare Earth announced a similar one-month halt to production last October, also in an attempt to push up prices by reducing supplies.

The United States, the European Union and Japan have challenged China's quotas in the World Trade Organization as a violation of its free-trade commitments. Beijing has defended its controls as necessary to safeguard a scarce resource and minimize environmental damage from mining.

Rare earths are 17 minerals used in goods including hybrid cars, weapons, flat-screen TVs, mobile phones, mercury-vapor lights and camera lenses. The United States, Canada, Australia and other countries also have rare earths but most mining stopped in the 1990s as lower-cost Chinese ores came on the market.

The global economic slowdown has hurt demand, pushing down rare earths prices. Some manufacturers have been prompted by the Chinese controls to switch to alternative materials.

Beijing's trading partners complain its export controls push up rare earths prices abroad and give buyers in China an unfair advantage.

The price of one rare earth, lanthanum oxide, has fallen 65 percent on global markets since the start of this year to $15 per kilogram this week, according to Lynas Corp., an Australian miner. But that still is nearly double price of $9 per kilogram paid by buyers in China.

Other rare earths have shown similar price declines and a wide margin between prices in China and abroad.


China rare earths producer suspends output - Businessweek

 

[anon45]

No big deal economically and politically. China should limit her rare earth exports and save them for future use that will ease environmental destruction.

Just means lost revenue, and possibly jobs, but it is no big deal I agree. Powers will get their needs met elsewhere, China loses a stick, and we'll all be happy.

 

[shuttler]

Just means lost revenue, and possibly jobs, but it is no big deal I agree. Powers will get their needs met elsewhere, China loses a stick, and we'll all be happy.

There is nothing important to these revenue and loss of jobs! We will not be dying because of them. Just a scratch!

Better drum up your country of origin and your adopted one for the excavation of the materials.
No need for your cheerleading for China's suspension of excavation here!

 

[Obambam]

It is only common sense for them to cut back as they are currently experiencing exports decline. Which can only mean one thing - their economy is feeling the squeeze. It doesn't hurt China even if they reduce their demands for the rare earth. They weren't that profitable for China to begin with.

 

[terranMarine]

China still has plenty of sticks to slap Japan, so yes it doesn't hurt China with the decline.

 

[applesauce]

>>china has been trying to restrict exports and curb illegal mines as well as consolidate various groups

>>indians acting as though this is a danger to china when its their plan the entire time.

as far as im concerned, the rare earths barely makes any money for the chinese but comes with horrible environmental costs. to deal with japan, simply wait a decade then they got no chance

 

[Battle of Bach Dang River]

Last update 18/05/2012 11:22:38 SA (GMT+7)
Vietnam inks rare earth agreement with Japan

A memorandum of understanding (MoU) on mining and processing rare earth in northern Lai Chau province’s Tam Duong district was signed with Japan on May 17.
Lai Chau-VIMICO Rare Earth Joint Stock Co and the Japanese Dong Pao Rare Earth Development Co have agreed to join hands through two phases of the project.
The first phase is to research and set up a mine with a capacity of 10,000 tonnes a year.
The second phase is to negotiate over the establishment of a Vietnam-Japan joint venture with charter capital of at least 30 percent of the project’s total investment value.
Lai Chau Rate Earth-VIMICO director Bui Van Huyen said the MoU was the first step in co-operation between Vietnam and Japan in exploiting and processing rare earth in Dong Pao, the largest rare earth mine in Vietnam.
They would also co-operate to develop the domestic rare earth industry, he said.
Both sides undertook to use advanced technologies to exploit the mine, protect the environment, assure people’s rights and pay full taxes to Vietnam.
They committed to assuring project information security and not negotiating or arranging with any third party to develop the project without written approval of the other side.

Vietnam inks rare earth agreement with Japan - News VietNamNet

 

[fly2012]

This is good news. It is one of the silliest policies to export rare earth metals in such scale with little gain but huge environmental cost. There's a reason why US stopped digging it.

 

[rcrmj]

clueless cheerleading Indians as usual```we are more than be happy of this news``rare earth is a national strategic asset, vital to high tech sector, and sadly huge environmental effect

 

[WS-10 Engine]

For the life of me I don't understand why we even export ANY natural resources.

Rare earth, oil, natural gas, coal, iron ore, copper, etc should NEVER be exported.

If the foreigners want rare earths, go find it themselves.

 

[Anonymous user]

On a related yet unrelated article, there was a Australian Mining company operating a rare earth refinery in Malaysia which has stalled due to protest about the pollution of rare earth processing. The town was hit before when a similar Japanese plant operated there and was shut down. I'm quite familiar with Rare earth as it one of our investment plays for awhile. For an economy in general it poses more harm then good

Cookies must be enabled. | The Australian

Interestingly enough I came across an article long time back (unfortunately did not save it). China decided to hammer Rare Earth was a strategic decision, the monopoly of rare earth was not as simple as some might think. Back in the 70's or 80's I believe China already recognized rare earth as crucial for high tech products and started a two prong approach

1. They bought companies specialized in Rare Earth Tech (in the US) and brought their tech to China, this was before the strict investment rules we see today. A similar deal today would probably be halted.
2. They drive the price of REE down to encourage foreigners to invest in China and bring their tech know how to China with regards to creating REE products.

Now that they achieved the goal of creating their own REE line of products they probably see no need to further control the price of REE. In fact if you manufacture in China the price of REE is still cheap, only the export price is expensive.

Its all part of an elaborate strategy, Light REE is really in fact plentiful in the world except the refining cost is expensive due to the environmental cost.

In fact if you think about it why would Lynas excavate a mineral from Australia and Ship it to Malaysia for processing, purely because Australia is a developed country with strict environmental laws. They were probably hoping to bribe their way in Malaysia and dump the toxic waste somewhere else.

 

[Obambam]

Last update 18/05/2012 11:22:38 SA (GMT+7)
Vietnam inks rare earth agreement with Japan

A memorandum of understanding (MoU) on mining and processing rare earth in northern Lai Chau province’s Tam Duong district was signed with Japan on May 17.
Lai Chau-VIMICO Rare Earth Joint Stock Co and the Japanese Dong Pao Rare Earth Development Co have agreed to join hands through two phases of the project.
The first phase is to research and set up a mine with a capacity of 10,000 tonnes a year.
The second phase is to negotiate over the establishment of a Vietnam-Japan joint venture with charter capital of at least 30 percent of the project’s total investment value.
Lai Chau Rate Earth-VIMICO director Bui Van Huyen said the MoU was the first step in co-operation between Vietnam and Japan in exploiting and processing rare earth in Dong Pao, the largest rare earth mine in Vietnam.
They would also co-operate to develop the domestic rare earth industry, he said.
Both sides undertook to use advanced technologies to exploit the mine, protect the environment, assure people’s rights and pay full taxes to Vietnam.
They committed to assuring project information security and not negotiating or arranging with any third party to develop the project without written approval of the other side.

Vietnam inks rare earth agreement with Japan - News VietNamNet

Well, good luck researching and setting up the mine. It would be hard pressed for Vietnam or anyone else to beat China's pricing on these earthly materials. Lets hope it will not matter too great a deal on their (Japanese companies) profit margins. They sure have a lot of room for maneuver in that department now.

S. Korea rare earth import from China grows 19% |Industries |chinadaily.com.cn

S. Korea rare earth import from China grows 19%
Updated: 2012-10-18 17:26 ( Xinhua)

SEOUL -- South Korea's rare earth import from China grew 19.1 percent last month due to a fall in import prices, customs data showed Thursday.

South Korea purchased a total of 72 tons of rare earth material from China in September, up 19.1 percent from a month earlier, according to the Korea Customs Service. It was a rebound from a 60.6 percent plunge tallied in the previous month.

The rebound was attributable to a decline in import prices, which fell 8.6 percent last month. Import from China increased, but inbound shipments from Japan contracted last month.

Related reading: China announces second rare earth export quota for 2012

Rare earth import from Japan tumbled 36.2 percent on-month to 41 tons in September, but those from France soared 38.8 percent to 64 tons.

In terms of value, rare earth import from China expanded 26.9 percent on-month $3.11 million in September. Those from France increased 12.8 percent to $1.93 million, but inbound shipments from Japan plunged 44.8 percent to $1.06 million.

Rare earth materials, including scandium and yttrium, are key components for modern-day technologies such as hybrid electric vehicles, liquid crystal display and other high-tech products.

Meanwhile, magnesium import from China increased 11.9 percent on-month to 736 tons, with those of tungsten surging 107.7 percent to 39 tons.

Cobalt import from China retreated 2.6 percent to 382 tons over the same period, but molybdenum import jumped 43.1 percent to 438 tons last month.

It would be a great shame seeing their hi-tech industry get taken over and replaced by the South Koreans.

 

[AADHAAR]

^^^^ So, in other words, China is unhappy to sacrifice it's environment for Japan's benefit.

But, China is extremely happly to sacrifice it's environment for Korea's benefit.