China's rare earth industry is hard to conceal: The price of raw materials for export repurchase has doubled

From local to central enterprises, from domestic to international, this battle for resources has begun...
As a "modern industrial vitamin," rare earths account for about 46% of the world's reserves. At one time, it "opened its doors" to supply more than 95% of the world's market demand. In this context, in 2010, China proposed its own industrial development strategy. After “commanding” mining and controlling export quotas, the amount of price reductions rose. China’s rare earth no longer sells “cabbage prices,” but it also attracts many international refutations. In the same way, there are also many chaos in the domestic rare earth industry.
How important is rare earth to the country? Why should China introduce restrictive policies? Why does the Chinese government have to supervise strongly and whether or not the phenomenon of rare earth being sold at a "earth" price before it can be contained? We will wait and see.
From the beginning of 2010 to the present, rare earths ups and downs in public opinion. Issues such as private indiscriminate mining, export smuggling, waste of pollution, decentralized operations, low-cost sales, and overcapacity have frequently been reported to the newspapers. Calls for the rare earth resources to be urgently consolidated have been rising at the beginning of 2010.
Before 2010, China’s rare earth industry was still struggling. After the financial crisis, the world’s demand for rare earth products fell sharply. In the first half of 2008, the price of rare earths in the country substantially “dived”: the original ore decreased from 76,000 yuan/ton to 64,000 yuan. RMB/ton, the rare earth oxide product, the symbolic product of rare earth, once dropped from RMB 220,000 per ton to RMB 135,000 per ton.
Under such circumstances, why is the supply of 90% of the world's rare earths to China's "sold up," and various ministries and commissions related to the supervision of rare earths, such as the Ministry of Commerce, the Ministry of Industry, and the Ministry of Land, have started strong supervision.
Quotation of quotas On December 15, 2010, Ministry of Commerce spokesman Yao Jian stated at a regular press conference that in 2011 China's exports of rare earth quotas are still being discussed with relevant authorities and will be announced to the needs of the market.
From the end of the year to the end of the year, the rare earth industry is waiting for the Ministry of Commerce to publish the “Rare Earth Export Quota Index for the first half of 2011”. In the view of the industry, the policy formulation of quotas is related to the pricing power of rare earths in the international market and the survival of domestic enterprises.
At the beginning of July 2010, the Ministry of Commerce announced the export quota for rare earths in the second half of 2010. In the second half of the year, the total quota of foreign-invested enterprises was 7,976 tons, and the total quota for the whole year was 30,258 tons, while the quota for the whole year of 2009 was 50,145.1 tons. Compared with 2009, the amount of quotas has dropped sharply. This makes the company overwhelmed.
“The export quota quota in the second half of 2010 was unexpected to everyone. Our foreign customers discussed with us who we are going to discuss?” a person in charge who was hit hard due to a reduction in quotas went to operate in China. The "Reporter" said that in 2010, export quotas dropped by nearly 70% year-on-year, making it difficult for companies to accept.
In fact, the strongest response came from foreign governments and corporations, rather than domestic companies. Relevant leaders of the United States, Japan, and the European Union expressed dissatisfaction with the Chinese government at different times and occasions.
Faced with international doubts, "China's 46% of reserves cannot supply 90% of the global market for a long period of time" has become the most powerful response, and "environmental pressure" is also a reasonable reason for China to limit production and reduce exports.
As the quota policy has gradually tightened, many stakeholders who have benefited from it, such as enterprises, local governments, and research institutions, have begun to suffer losses. As a result, many stakeholders have expressed different opinions.
Among them, "quota is not subdivided" has become the target of public criticism. The so-called non-dividing principle mainly means that the "light" and "heavy" rare earth quotas are not subdivided. The general manager of Baotou Steel Rare Earth Co., Ltd. repeatedly mentioned to the media the shortcomings of the current wide range of rare earth export quotas. “Precious resources are not protected and they can be sold but not sold.” The drastic reduction in quotas has made the drawbacks of the “one size fits all” mechanism more prominent. .
However, the "Registration Criteria and Application Procedure for Rare Earth Export Quotas for 2011" published on the website of the Ministry of Commerce on November 10 did not address the request for quota breakdown, which means that the issue of “one size fits all” will continue in the next half year.
The relevant persons from the Ministry of Commerce and the Ministry of Industry and Information Technology all told reporters that the existing export quota system was formed after many years of running-in. Although there are drawbacks, it is not easy to change it immediately. “Continuation of the old ones before they could find a better solution. The system is reasonable."
The strong regulatory countries have always followed the pattern of reducing output from the use of rare earths. In the industry's view, the long-term surplus of rare earth production in China has resulted in the sale of rare earth products. At present, the domestic rare earth resource production capacity reaches 200,000 tons, which is far greater. 100,000 tons in market demand.
In fact, from the date when the “guidance plan” was changed to the “command plan” in 2006, Chinese rare earth production embarked on the old path of the “planned era,” which means that the country’s determination to control the mining and smelting of rare earths is more determined. Strong.
However, unexpectedly, the “planning measures” did not control the chaotic situation in the production of rare earths. In 2007 and 2009, the output of rare earths in the country substantially exceeded that of the mandatory plan for the year and exceeded the standard in 2007. The rate reached 50%. In 2009, it exceeded 50% of market demand. The country's attempt to pull up the price of rare earths with “limited production” failed.
At the same time, there are phenomena of private indiscriminate mining and frantic stolen mines in the north and the south, and the associated rare earth smuggling crimes. From the large-scale rare earth smuggling case seized by the Customs in the past two years, we can see that the production cuts of the domestic formal enterprises have led to an increase in illegal activities.
Contrary to the trend of the enterprise and chaos in the industry, the country has made painstaking determination, and the rare earth industry has finally ushered in a “shocking” change in 2010. From May 2010, government actions involving various aspects of the rare earth industry, such as production and reorganization, reserve opening, corporate restructuring, system revision, and quota reduction, took place alternately, and were originally accustomed to the real feelings of local enterprises that the management department “had little thunder and rain”. To the lethality of the policy.
"One "Rare Earth Industry Access Requirements" and one "Rare Earth Industrial Pollutant Emission Standard" have eliminated more than 60% of the companies. The future of rare earth industries will inevitably be a new pattern." Beijing Nonferrous Metals Design and Research Institute Deputy Dean Wang Guozhen stated that the policy in 2010 was to rectify all aspects of the industry, instead of focusing on a certain link, production, sales, and application were all included in the scope of rectification, and the rare earth industry faced a fundamental change.
The central government's strong policy of rectifying small businesses is that central enterprises are ready to go. In September, the State Council’s Opinions on Promoting Mergers and Reorganizations of Companies listed rare earths as its work priorities. Large companies such as Minmetals, Chinalco, and China Color, which are involved in the non-ferrous metal industry, have accelerated in Sichuan, Jiangxi, Hunan, Guangdong, and Guangxi. Rare-earth resources are abundant in the provinces and cities.
If the goal of “reduction of smelting and separation enterprises from 100 to 20” proposed in the “Special Planning for Rare Earth Industry Development (2009-2015)” is successfully achieved, the competitive landscape of China’s rare earth industry will shift from “Spring and Autumn” to “Warring States”. .
Analysts inside the industry have analyzed that with the participation of central enterprises in rare earths, the game between local governments and foreign “predators” will continue to be staged. It can be proved that in the near future, rare earth industries have emerged in Inner Mongolia, Hunan, Guangdong, and Fujian provinces. The leading enterprises of the future, the contest between the future state-owned enterprises and the local government state-owned enterprises will continue.
With regard to internal control and strict control on exports, experts in the industry believe that any policy concerning the introduction of rare earths in 2010 is considered to be the beginning of China’s control over the right to speak of rare earths.
For the international community, "What does China buy expensively, what does China sell cheaply?" It seems to be an iron law. Rare earth that is included in strategic resources by various countries is expected to change this situation.
One year later, the world's rare earth prices have risen sharply because of China's reduced supply. Many products have doubled year-on-year prices compared to 2009. For example, on September 30 this year, the spot prices of Shanghai Metals and Galliums reached RMB 316,500/tonne, compared to 2008. It increased by 224.6% in December.
China seems to have regained its say in the pricing of rare earth products. However, according to data provided by the Wall Street Journal in the United States, China exported US$233.6 million in rare earth metals in the first six months of this year, while Japan’s exports amounted to US$22.5 million. Second only to China. Japan's rare earth resources are basically from China, and it is leading China in deep processing technology. Many products were eventually sold back to China, and the prices have doubled or even increased hundreds of times.
Therefore, some commentators pointed out that resource advantages do not necessarily mean “speech rights.” In addition to resources and output, the technology of rare earth industries is an important factor that cannot be ignored.
“After this round of rectification, the industry structure should be improved, but our gap in application is not a bit of a point. This hurry is not allowed, and the road to go is still to go.” said Wang Zhongshan, Vice Director of Nanjing Rare Earth Applied Research Association. .
The current reality is that the core patented technologies of rare earth applications, including the core technologies of permanent magnet motors, hydrogen storage materials, and luminescent materials industries, which are claimed to be in the three major areas of rare earths, are in the hands of developed countries such as the United States and Japan. China’s market prosperity is built on Huge amount of royalties.
The chaos of the industry can be ruled with iron fists, but the development of the application industry lags behind, but it is difficult for administrative orders to change in the short term. At the end of November, Japanese media claimed that China had resumed supplying rare earths to Japan. The reason was that the "emission of rare earths" caused Japan's exports of high-tech products to China to drop sharply. China's behavior was "not worth the candle".
According to the latest news, Sumitomo Corporation, Japan's third-largest integrated trading company, will make a big contribution to Molycorp, the largest rare earth miner in California. In the spring of 2011, it will allocate about 2,000 tons of rare earths. In 2012, the import volume is expected to increase to 3,000 tons, which can meet the total demand of rare earths in Japan. At 10% of demand, Japanese companies are seen as hedging China’s continued reduction in export quotas.
In fact, Japan and South Korea began to seek new supplies of rare earths outside China, and Kazakhstan, Vietnam, Mongolia, Australia, and Indonesia have all had contact with them. Although, the vast majority of rare earths in Japan, South Korea and other countries will still depend on China for supply in the next two years, but the global rare earth market

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