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Old 08-20-2014, 01:24 PM
Sparty Sparty is offline
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Default China's State Reserve Bureau (SRB) purchased 10,000 tonnes of rare earths this month.

The article below just arrived in my in-box. I don't usually republish but this is very interesting and important for lots of reasons....

China's State Reserve Bureau (SRB) purchased 10,000 tonnes of rare earths this month.


The rumor popped up so often over the course of this year that no one took it seriously anymore.

But since then, the prices of a number of rare earths elements, such as dysprosium, praseodymium and neodymium have firmed on the news as Chinese exporters mark up their prices in response.

It will be interesting to see if prices drop back after a while as they have done after previous SRB purchases or producers stoppages.

But the question is why did the SRB do it?

I've seen suggestions that it is linked to the WTO's ruling against China's policies of imposing quotas and taxes on its exports of rare earths.

Basically that it is another mechanism to support rare earths prices ahead of the abolition of export controls.

Personally, I don't entirely buy that. After all the SRB has made these purchases before.

I think it is partly to support rare earths prices, in that it provides an indirect subsidy to producers as some apparently saw the procurement as a bit of a god send.

But I believe there might be a more fundamental reason behind the purchase.

And the clue partly lies in the breakdown of what the SRB bought:

It was the oxides of praseodymium/neodymium, dysprosium, terbium, europium, erbium, lutetium, neodymium, praseodymium and yttrium.

No cerium or lanthanum?

Admittedly, it would probably have required a lot more than 10,000 tonnes to move the dial on the prices of those two elements. But in terms of a pure subsidy it would have helped Chinese producers to include them on the list since they are the most important in terms of output by volume.

Unless of course one wants to think about this in Machiavellian terms: why push up prices of the two elements which are so important to foreign rivals Molycorp and Lynas Corp? (Especially as they are very near to being in oversupply... ed note)

But I think China is simply anticipating potential future shortages of some rare earths (particularly heavies & mediums) and wants to make sure its domestic industry doesn't go without.

Most of the elements on that list are associated in some way with high-tech and military applications. The key magnet rare earths, for example, are well represented on that list, though not all of them made it.

Within a decade some of those rare earths could be in short supply, be a lot more expensive, and given China is the largest consumer of rare earths and that is set to carry on climbing it would also suffer the most from potential shortages.

Still that's just my point of view.

How about a Chinese point of view?

I'm sure you'd agree that it would be really interesting to get a Chinese point of view on issues such as stock piling and China's industrial strategy for its rare earths resources.

And you will have such an opportunity next month.

These issues will be discussed at length at our Rare Earths conference in Chengdu on Sept 10-11.

And importantly, a number of the speakers are from China's rare earths industry. We even have someone from Baotou Rare Earth ? the world's biggest producer.
Click here to take a quick glance at the programme.

So if you buy, sell, plan to produce rare earths or develop new products with them, then I believe this will be a very good opportunity to get an insight into what the Chinese are planning for rare earths.

It will also be an excellent opportunity to mingle with industry names from China and other parts of the world. Hope to see you there. By
Nigel Tunna -Vice President - Metals
http://conferences.metal-pages.com/p...e-earths-2014/

Read about Australian Rare Earths and find out quickly and easily who has the heavy REEs.



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