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"Chinese Still Bullish" Rare Earth

China's Ministry of Commerce (MOFCOM) announced announced in October 28th the total export quota of a number of agricultural and industrial products 2015. It was announced that next year's exports of industrial metal product quota includes 17000 tons of tin and tin products (metal volume) 59400 tons; antimony and antimony products; indium 231 tons (metal content) of 5387 tons; silver (Jin Shuliang);

1.673 million tons of magnesia; 0.75 million tons of pulvistalci (lump); 6,200 tons of licorice and its products and 1 million tons of rock phosphate. Moreover, on November 3th, the MOFCOM yet issued an announcement about the requirements and procedures for applying for the export of tungsten, tin, antimony, indium and silver in 2015.

As a result of the Appellate Body of the World Trade Organization (WTO) ruled in August against China’s export restrictions – including export quotas and export duties on rare earths, molybdenum and tungsten, there has been significant change in the country’s circumstances from the previous year’s export quotas for the industrial products, on which the MOFCOM no longer to set its molybdenum and tungsten export quotas for 2015. (China’s 2014 export quota for tungsten was 15,400 tons and for molybdenum was 25,000 tons respectively, the data from the MOFCOM showed.)

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Despite Beijing currently has not yet issued new policies and measures as a substantive response for the scrapping its quota and export tax on rare earths, molybdenum and tungsten, however, Chinese insiders are widely accepted that the government is preparing to cancel its export restrictions on rare earths, molybdenum and tungsten. Even so, Chinese insiders are still bullish on the country’s rare earths sectors, while investors still cling to rare earth hopes.

“15 tons of dysprosium oxide with the trading volume of RMB 22.35 million was sold within 24 seconds and 3 tons of terbium oxide with the trading volume of RMB 8.34 million was sold within 5 seconds.” According to China’s FANYA Metal Exchange (FYME), the world’s biggest spot trading exchange and investment platform for rare metals on October 31th officially launched dysprosium oxide and terbium oxide contracts in Beijing, “This marks that Chinese investors have started commercial stockpiling of rare earth minerals for the first time.” Chinese state-run media said.

Wang Qinhua, the vice president of China Nonferrous Metals Industry Association (CNIA), said on October 31th that China’s rare earth industry revenue was close to RMB 50.42 billion Yuan in the first nine months of 2014, a year-on-year growth of 5.58%, the domestic downstream demand for rare earth is gradually warming up.

CNIA expects that Chinese demand for rare earth magnets is growing at a rate of 9.5% per year by 2020, by the use of high performance NdFeB magnets in modern electric motors and generators, especially in the sectors of hybrid electric vehicles, wind turbines and inverter air conditioners.

Based on rare-earth metals, China’s demand for the hydrogen storage materials is estimated to reach about 80,000 tons by 2020, driven by a huge investment of RMB100 billion in “energy saving and new energy automobile industry plan (2011-2020),” particularly in China’s new energy auto industry, according to CNIA.

With the wide application of rare earth in the new fields of luminescent material in China, CNIA estimate that the country’s demand for rare earth luminescent material is growing at a rate of 4.7% per year while the demand for rare earth phosphor is expected to reach about 6,000 tons by 2020, driven by the demand in domestic market, such as energy-saving bulbs and consumer electronics industry.

CNIA yet expects that the consumption of rare earth catalysts in the country is growing at a rate of about 7% per year by 2020 due to the huge domestic demand, such as the country’s 2013 total car population reached 137 million.Source:investorintel.com

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