From Hongpo Shen - April 10, 2014
A look at the recently opened Baotou Rare Earths Products Stock Exchange (Baotou Rare Earth Products Exchange) as well as the Rare Earth Stock Exchange makes it clear that rare earth prices in China have recently gained strength. This development is by the Chinese State Bureau of Material Reserve (SBMR) and its efforts to initiate a new round in the storage of rare earth reserves.
The state China Securities Journal reported on 9. April, that an agreement on reserves between the SBMR and some large producers of rare earths (including China Minmetals Rare Earth, Inner Mongolia Baotou Steel Rare Earth, Chinalco Rare Earth, Rising Nonferrous Metals Co Ltd, Ganzhou Rare Earth and Xiamen Tungsten Co. ) was signed. As a result, 13.000 will add additional tonnes of rare earths to the country's strategic reserves, with a purchase price likely to be about 10% higher than the market level, slightly above the average of the last six months.
Based on the volume of national reserves, the top rare earth companies / producers will be forced to increase their reserves by around 30%. This will certainly cause the prices of rare earths to rise in the short term. Therefore, according to market participants, it is expected that the prices for rare earths in China will rise in the coming weeks against the background of the threatened increase in state reserves.
Although large Chinese high-end NdFeB manufacturers have been at a level of 70% -80% since this year, demand for rare-earth commodities, especially in the rare-earth permanent magnet sector, was only 30% due to heavy overcapacities. -40%. However, China's demand for rare earth permanent magnets is expected to grow by 15% to 126.000 tonnes by the end of the year, according to a research report by Shenyin Wanguo Securities (SWS), a leading Chinese securities firm.
The Praseodymium Neodymium, Cerium Oxide and Europium Oxide Dealing Prices on the Baotou Rare Earth Products Stock Exchange (Baotou Rare Earth Products Exchange), are already from 320 yuan / kg to 364,7 yuan / kg, 19,5 yuan / kg to 22.02Yuan / Kg and 4000 yuan / kg to 4571 yuan / kg over the past nine trading days, since the 28. March, rose. According to Jia Yinsong, from the Ministry of Industry and Information Technology (Ministry of Industry and Information Technology) "Is expected to be the Baotou Rare Earth Products Exchange (Baotou Rare Earth Products Exchange) govern the country's rare earths market, improve the way prices are generated and promote the development of the industry.
In recent decades, export prices for China's rare earths have been comparatively low due to the lack of environmental protection costs associated with producing rare earths. China will proactively implement the implementation of a series of new fiscal measures in this highly polluting sector in order to protect the environment. Environmental tax legislation has officially started and Chinese experts expect it to be implemented next year. China's latest move to introduce a new rare earth environmental tax from 2015 will push prices further.
As the world's largest producer of rare earths, China supplies more than 90% of the world's supply. Despite the WTO ruling that is forcing China to cut its export quotas, global dependency on China's rare earth exports will continue.
The rare earth market is a small market, but crucial to ensuring the sustainable development of high-tech industries and national defense. The WTO ruling has forced China to rethink its regulatory policies on the rare earth industry.
The Association of Chinese Rare Earth Industry is now studying the WTO report and evaluating its impact on the country's rare earth industry. The association will also host the 2014 International Conference on Earth Resources and Marketet in Guangzhou, China from the 16-18 June 2014, which provides a welcome opportunity to engage with the latest Chinese rare earth industry policy.
Source: Shen, Hongpo (10, April 2014) China's new round of rare earth stockpiling to boost prices.
http://investorintel.com/rare-earth-intel/chinas-new-round-rare-earths-stockpiling-boost-prices/
