Tag: Chinese Rare Earths

Rare Earths MMI Stagnant, Substitution and Recycling Decimate Prices

Our Rare Earths MMI held steady, or flat, depending on how you look at it, at 17 this month, an example of how stagnant prices have been in a low range this year.

Two-Month Trial: Metal Buying Outlook

The low price of rare earths did not come about because of export quotas being struck down in China or the World Trade Organization loss that precipitated the quotas’ end. In China, heavy rare earths production became more stable, but that wasn’t the reason either. What has caused the rare earths market to essentially collapse is substitution on a large scale and better recycling of the high-tech minerals.

Rare-Earths_Chart_August-2016_FNL

Rare earths demand has fallen because manufacturers sought to eliminate the threat of a national blockade, the likes of which Japan felt after Chinese rare earths producers essentially blacklisted the country in 2011.

Companies such as Siemens, Samsung and Honda have accelerated research on how to use less of the minerals, especially the “heavy” rare earths such as lanthanum and dysprosium. In that way, China hurt its own monopoly by forcing their customers to apply more ingenuity and brains to eliminating or limiting the scarce elements in their supply chains. Honda even produced a hybrid car engine, the first ever, that doesn’t rely on heavy rare earths.

Honda’s apparent turning point was a partnership with fellow Japanese firm Daido Steel in 2011, prompted by China’s squeeze. The result today is a new technique for designing crucial engine magnets that avoid heavy rare earths and are 10% cheaper and 8% lighter, Honda told the Wall Street Journal.

Compare Prices With the 2016 MMI Report

The world will still likely need rare earth elements, particularly for renewable energy products such as solar panels and wind turbines, but the evidence of the damage done by China’s attempt to corner the market on heavy rare earths is now overwhelmingly apparent and a recovery in prices will not happen in the short term.

Rare Earths Prices Stagnant, But Exploration Continues

In early June, the Chinese government held an auction for nine types of rare-earth metals, but bids came in below the production costs of China’s six major, consolidated suppliers.

Rare-Earths_Chart_July-2016_FNL

This year, China plans to add about 20,000 metric tons to its rare earth stockpiles. The six major suppliers are to keep 5,000 mt at government-designated warehouses and Beijing is to purchase the other 15,000 mt from those same six suppliers.

Two-Month Trial: Metal Buying Outlook

Beijing is hoping that the stockpiles will make prices rebound as, except for a few minor increases, rare earths have fallen for the entire year.

Our Rare Earths MMI fell another 6% this month and there is little reason to expect the important metals for batteries and magnets to escape the low range they’ve fluctuated in for the last two years. Dysprosium and neodymium both lost ground this month as demand has faltered for the motors and batteries both are used in. Yet, it wasn’t an entirely lost month for rare earths.

Scandium Exploration

Texas Mineral Resources signed a memorandum of understanding with an unnamed coal company in Pennsylvania to produce scandium and other rare earth byproducts from coal ash and tailings. Initial studies on the coal ash project there suggest modest capital expenditure would be required, along with profitability.

Scandium is used in fuel cells today but its future as an additive in high-strength aluminum is bright. We’ve already written about Airbus‘ experiments with it in both 3D-printing and generative design. If TMR’s scandium from coal ash experiment is successful, its plan to establish a new subsidiary titled Scandium America Corp. with the unnamed Pennsylvania Coal Company.

This won’t affect prices anytime soon. Scandium isn’t even a part of the Rare Earths MMI yet. However, it shows that manufacturing companies are demanding more and rarer metals snd companies are devoting significant resources to providing them.

India Sets Aside Rare Earth Blocs

India is also exploring more rare earths production. The nation recently issued new policy guidelines to encourage more private-sector exploration for the minerals that demarcates a total area of 1,000 square kilometers (386 square miles) where companies can search for rare earths, and introduce auctions for the right to explore for the deposits, according to Balvinder Kumar, the top bureaucrat in the nation’s Ministry of Mines.

Free Download: The June 2016 MMI Report

India has one of the world’s bigger reserves of rare earths and Prime Minister Narendra Modi wants to cut the red tape involved with setting up new mines. The region to be earmarked for exploration includes states such as Kerala and Tamil Nadu, according to Kumar, with another 400 square kilometers set aside exclusively for state-run companies to search for uranium and thorium.

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