Situation with rare earths
At the end of November, Beijing released a list of 28 companies, which will also be granted export quotas for the year 2014. This means, first of all, that the recent WTO ruling did not move China to lift its export quotas. For the first time, a renowned company is listed by name as "unqualified" because it was pilloried in 2013 for smuggling goods.
On the 10. On December, Asian Metal reports that Chinese customs authorities have managed to uncover a large-scale smuggling ring. Within 2 years, this organization illegally shipped 130 t Rare Earths (2% of Chinese annual production) out of the country. Many market participants believe that the increasing success of the Chinese authorities will soon reverse the persistent decline in prices.
Strategic reserves
After the economic powers of the Far East have built up successively stocks of strategically important raw materials for several years now, the US defense budget also plans for 2014 to set up an extensive contingent of strategic reserves. These include, among others, the rare earths yttrium and dysprosium.
There are reports from China that the government wants to buy 50 t Gallium for strategic reserves. That's about 15% of the world market! In addition, the Fanya Metal Exchange (Chinese platform for private investors) has been steadily buying larger quantities of gallium for several months. This could be interpreted as a signal. Because both Beijing and Chinese investors seem to react to the predicted increase in demand of this metal, whose price is still on the ground.
Also indium is continuously being bought in large volume by the Fanya Metal Exchange. These days, however, Metal Pages reports that the market is currently no longer able to meet the needs of Fanya Metal Exchange sufficient. This too can be understood as an alarming sign!
On the 13. Dec., Metal Pages reports that Beijing is in 1. Quarter 2014 for strategic reserves 30 t Germanium wants to buy. This corresponds to 1 / 3 of Chinese annual production!
A new player in the small Rare Earths and Strategic Metals market is the British company FEM (www.fem.uk.com), which launched a critical-element stockpile program on a private basis. Since November, larger quantities of gallium, germanium, indium, terbium and dysprosium have also been purchased here.
Substitutes only conditionally possible
At regular intervals we hear about substitutions or technological breakthroughs. But a study by the American Yale University published at the beginning of December now says that there are no better substitutes for 62 Metals. For 12 of these metals a replacement is completely impossible; including rhenium and dysprosium. This is partly in contradiction to the statements of many industrial companies, which repeatedly spread different messages. However, according to Yale University, substitutes are often at the expense of performance, or in many cases new technologies can not be realized on a commercial scale or on economically justifiable terms.
Electromobility of the future
IDTechEx UK market analysts released a study in December stating that the market for hybrid and electric vehicles should increase by 10% over the next 400 years. This leads to a significant increase in demand for critical raw materials. These are on the one hand the so-called magnetic metals dysprosium, neodymium, praseodymium and terbium. Also highlighted is gallium, which is to be given preference for more powerful capacitors over conventional materials.
Should supplies fail to keep up with the forecasted demand trend, the prices of these raw materials should soon pick up again.
With the kind support of TRADIUM
