CIC consultants suggest: The data shows that China's rare earth exports in the first two months of 2011 were 7,084 tons, an increase of only 0.3%, but the export value increased by 568% over the same period of the previous year to 31.43 million US dollars.
Text / China Investment Advisory

Data show that in the first two months of 2011, China's rare earth exports amounted to 7,084 tons, an increase of only 0.3%, but the export value increased by 568% from the same period of the previous year to 31.43 million US dollars. At present, the average price of rare earth metals is US$44,361 per ton, nearly double the average price of US$23,603 last year, and is several times the price of the first two months of 2010.

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Yuan Zhibin, a researcher in the metallurgical industry of China Investment Consulting, pointed out that although the export volume is flat, the export volume has skyrocketed, which is closely related to the domestic restructuring of the rare earth industry. Although the rare earth industry does not lack the incentive to support the continued rise in prices, the industry has seen many problems in the ongoing high-priced market. In the upstream mining sector, prices continue to rise, which in turn affects the downstream links. Due to the unsmooth price transmission mechanism, the profits of downstream enterprises are compressed, and the survival of downstream enterprises becomes more and more difficult due to the phenomenon of reluctance to sell goods.

Although the current high price reflects the scarcity of rare earth resources to a certain extent, it does not introduce environmental costs. The “Rare Earth Industrial Pollutant Emission Standards” issued by the Ministry of Environmental Protection will be implemented from October 1, 2011. With the strict implementation of environmental protection standards, environmental protection costs will inevitably be included in the production process, which will undoubtedly help At the stage, the rare earth price is already at a high level. Under the buffer effect of the transition period, the stimulating effect of environmental protection cost is expected to be reduced.

According to the “2010-2015 China Rare Earth Market Investment Analysis and Prospect Forecast Report” issued by China Investment Consultant, the demand for rare earth resources is growing stronger due to the development of emerging industries, and the trend of diminishing the share of rare earth in China's supply world is very obvious. Both production companies and application companies have urgent supply and demand needs. At present, China has become a major consumer of rare earths, and its share is still increasing. Especially, permanent magnet materials, hydrogen storage materials and luminescent materials involving new materials have occupied an important position in the world.

Zhang Yulin, research director of China Investment Consulting, pointed out that in the current situation of tight supply of raw materials and steady price, some downstream smelting enterprises have reduced production. And once the environmental protection mechanism is launched, a large number of workshop-style smelting enterprises will be forced out, and the rare earth industry is expected to be deeply adjusted. In the case of double limits, the reduction of export quotas year by year will prompt manufacturers to shift more power to domestic promotion and application, and the domestic market is expected to form a benign circulation loop.