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View Full Version : China cracks down on REE exports but is outwitted


Sparty
05-23-2011, 02:46 AM
Two interesting China related stories emerged this morning... the first relates to China's attempts to cut rare earth exports.... the second details how these measures have in reality failed... I guess China will respond more vigorously in the near future....


China vows crackdown on rare earth smuggling
Reuters reported that China will crack down on smuggling of rare earths and impose quotas for exports of rare earth alloy products as part of its campaign to reform the sector vowing on Thursday to no longer turn a blind eye to chaotic export regulation.

The campaign against smuggling is part of China's latest directive to strengthen its grip on the metals which Beijing has said have been recklessly exploited, giving cheap supplies to foreign markets at the expense of the environment and of China's own economic development.

China produces 97% of global rare earth supplies giving it a stranglehold over the range of elements used in mobile phone handsets and hybrid car batteries as well as wind turbines and weapons guidance systems.

Beijing has already slashed export quotas by 35% for the H1 of 2011 building on previous quota cuts and the decision has choked off global supplies and driven up prices to record levels. Beijing has angered many of its trading partners, especially Japan where many manufacturers rely on Chinese rare earths.

The Chinese government warned that foreign firms which have used underhand methods to get around those quotas will now face a tougher time. The government said that China will cap its total output of rare earth oxides at 93,800 tonnes this year up 5% from last year. Illegal rare earth exports from China have amounted to as much as 10,000 tonnes of supply last year, according to some industry estimates.

The Ministry of Commerce said that from Friday alloy products containing more than 10% of rare earth metals would also require export permits under the government quota scheme.

(Sourced from Reuters)


Government Strategy Fails As Chinese Rare Earth Exports Surge In Q1


Read more: http://www.businessinsider.com/china-rare-earth-exports-2011-5#ixzz1N8kLselY



China, the world's number one exporter of rare earth metals, just reported a year-over-year increase in its export of the materials, according to the Wall Street Journal (http://online.wsj.com/article/SB10001424052748704816604576336351109861400.html?m od=googlenews_wsj). The increase was not modest either, with Q1 exports rising 33%.


With 95% of the world market (http://online.wsj.com/article/SB10001424052748704816604576336351109861400.html?m od=googlenews_wsj) under its thumb, China's moves on rare earths matter a great deal for the market. What's interesting is that it doesn't appear the central government has complete control of the sector, with companies breaking rules about exports with frequency.
They've announced another crackdown, but there's no guarantee that will work either.

Read more: http://www.businessinsider.com/china-rare-earth-exports-2011-5#ixzz1N8kFk0u6








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