China Opens Up Rare Earth Exports, Index Ticks Up

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The monthly Rare Earths MMI® registered a value of 26 in February, an increase of 8.3% from 24 in January.

FREE Download: Compare With Last Month’s Rare Earths MMI.

After years of international court fighting China finally gave up on export quotas for rare earth elements this month. This action sent ripple effects across the global RE buying sector.

Rare-Earths_Chart_February-2015_FNL

The move brings immediate relief to REE-rich nations such as India that have held back on starting domestic REE industries for fear of being undercut by China. Beyond that, however, the adjustment of China’s exports policy was designed to cooperate with the country’s reform on management of related resource products.

On January 13 the principal of the Department of Treaty and Law of Ministry of Commerce (MOFCOM) gave a speech explaining what  China’s cancellation of export quotas on rare earth elements tungsten and molybdenum would mean for producers and exporters.

According to the MOFCOM announcement, a total of 75 kinds of rare earth products would be required to apply for export license. This includes 53 rare earth compounds; 16 rare earth metals; 3 rare earth alloys and 3 rare earth minerals. The customs codes of rare earth compounds and metals increased by 17 items, compared with the last year’s 52 kinds of rare earth products. It is hoped that the licenses will be relatively easy to obtain so that Chinese producers, making up 90% of REE producers in the world, will be able to begin exports to markets they had not previously served.

While many have lauded the World Trade Organization and globalization, in general, for ending China’s REE quotas, Alan Beattie of the Financial Times argues that it was good old-fashioned capitalism with a healthy dose of Chinese smuggling that finally got Beijing to scrap the quotas.

Meanwhile, here in the US Molycorp is sending mixed signals. It hired a law firm to help with restructuring early in the year, yet it nearly doubled production from the previous quarter at its Mountain Pass, Calif., operation.

The REE market has reacted favorably to China’s moves and the MMI is up for a second straight month. More time will be necessary, however, to know if this is just a short-term reaction to more supply availability or if purchasing of the elements will increase long-term.

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The price of terbium oxide climbed 20.6% to $608.38 per kilogram. It was a strong month for terbium metal. The metal posted a 10.0% increase, finishing at $704.44 per kilogram. Neodymium prices rose 9.4% to $61,638 per metric ton. Neodymium oxide reached $48,030 per metric ton after a 9.1% increase for the month. After dropping the previous month, the price of europium oxide prices rose 9.1% to $288.18 per kilogram. The price of dysprosium oxide rose 7.1% to $265.76 per kilogram after falling the previous month. After rising 5.9%, samarium oxide finished the month at $2,882 per metric ton. At $48,030 per metric ton, praseodymium neodymium oxide finished the month up 5.3%. Following a 3.8% change in price, lanthanum oxide closed the month at $2,161 per metric ton. Yttria prices inched up 2.9% to $5,603 per metric ton.

At $64,040 per metric ton, praseodymium oxide was down 2.4% for the month.

Last month was consistent for cerium oxide, which did not move from $2,001 per metric ton. Rare earth carbonate traded sideways last month, staying around $4,002 per metric ton. Prices for yttrium remained constant this past month, holding at around $43.23 per kilogram.

The Rare Earths MMI® collects and weights 14 global rare earth metal price points to provide a unique view into rare earth metal price trends over a 30-day period. For more information on the Rare Earths MMI®, how it’s calculated or how your company can use the index, please drop us a note at: info (at) agmetalminer (dot) com.

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