China rare earth prices soar on their potential role in trade war

Rare earth China

(Jonny Caspari, Unsplash)

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Tom Daly, Reporter, Reuters & Shivani Singh, Reporter, Reuters


Chinese rare earth prices are set to climb further beyond multi-year highs hit following a flurry of state media reports that Beijing could weaponize its supply-dominance of the prized minerals in its trade war with Washington.

Rare earths, a group of 17 elements that appear in low concentrations in the ground, are used in a wide-range of products stretching from lasers and military equipment to magnets found in consumer electronics.

China supplied 80% of the rare earths imported by the United States from 2014 to 2017, with Chinese state newspapers last month reporting Beijing could use that as leverage in the ongoing trade dispute between the two.

“(Magnet-related rare earths) are the ideal materials to weaponize … because they are so critical to high-demand, highly-competitive, price-sensitive industries,” said Ryan Castilloux, managing director of Adamas Intelligence, a consultancy that tracks rare earths markets.

“(Such rare earths) are collectively responsible for over 90% of the demand market’s value each year … (so they) will yield the most juice for the squeeze,” Castilloux said by email from Toronto, adding that prices were set to keep rising.

Prices of dysprosium metal, used in magnets, high-powered lamps and nuclear control rods, are currently assessed by Asian Metal at their highest since June 2015 at 2,025 yuan ($292.98) per kg.

That is up nearly 14 percent from May 20, the day Chinese President Xi Jinping visited a rare earth plant, sparking speculation the materials could be the next front in the Sino-U.S. trade war.

 

The price of neodymium metal, critical to the production of some magnets used in motors and turbines, has risen to its highest since last July at $63.25 a kg, up about 30% since May 20, according to Asian Metal.

The price of gadolinium oxide, used in medical imaging devices and fuel cells, is up 12.6 percent from May 20 at 192,500 yuan a tonne, the highest in five years.

Asian Metal is a research and price reporting agency that covers rare earth elements.

Chinese rare earth prices started to move “right after China announced the import ban” on rare earths from Myanmar, said Helen Lau, an analyst at Argonaut Securities in Hong Kong.

 

The state-run Securities Times reported on May 13 that customs in the southwestern province of Yunnan would ban imports of rare earths from neighboring Myanmar, a key supplier of middle-heavy rare earth feedstock, from May 15.

“But then a couple of days later, you can see a big movement in the prices – so that was mainly because of this possible weaponizing of rare earths,” Lau said.

“If China indeed weaponizes rare earths, the U.S. will not have enough supply because it needs some lead time to build their own processing capacity, which currently is zero,” she added.

Another analyst, who asked not to be identified due to the sensitivity of the matter, said that six major rare earth producers in China held the most stocks in the spot market, giving them power over prices.

The six major producers are China Minmetals Rare Earth Co, Chinalco Rare Earth & Metals Co, Guangdong Rising Nonferrous, China Northern Rare Earth Group, China Southern Rare Earth Group and Xiamen Tungsten.

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

the sting Milestone

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

EU Parliament: The surplus countries must support growth

The world is too complacent about epidemics. Here’s how to change

3 vital steps to a new gender equality playbook

From low-earth orbit, ‘envoys’ of humanity join UN space forum

ECB to play down IMF’s alarms for deflation danger in the EU

Colombia: Santos thanks the EU for its support to the peace process

As Saudi women take the wheel, UN chief hopes end of driving ban creates more opportunities for kingdom’s women and girls

Aid teams respond to escalating southwest Syria conflict: 750,000 civilians are at risk

Here’s what keeps CEOs awake at night (and why it might be bad news for your next job)

Free trade agreement between EU and India?

EU unveils plan to accelerate Capital Markets Union ahead of London’s departure from the bloc

The developing countries keep the world going

Safe drinking water, sanitation, are ‘basic human rights’: new UN Water Development report

Parliament wants to suspend EU accession negotiations with Turkey

AIESEC @ European Business Summit 2014: European Youth, Change Now Patiently

Rise in number of children killed, maimed and recruited in conflict: UN report

How to tap the talents of refugees – one student at a time

Four ways innovation can help to beat heart disease

Brazil’s hopeless future of science

Feeding families remains complex task in war-torn Syria – UN relief agency

Google strongly rejects EU antitrust charges and now gets ready for the worst to come

‘Global trust’ declining, ‘our world needs stepped-up global leadership’

G20 LIVE: “United States and Turkey stand in solidarity with France and its people in handing the perpetrators of this crime and bringing them to justice”, US President Barack Obama underlines from G20 in Antalya Turkey

MEPs call for decisive action to fight inequalities in the EU

The global issue of migration in 2017

What can the private sector do to alleviate the refugee crisis?

Brexit update: Will Theresa May’s last-minute desperate efforts procrastinate Brexit?

Obese people more likely to smoke, says new gene research: WHO

This Dutch company has devised an innovative way to deal with food waste

UN chief welcomes prisoner exchange between the Russia and Ukraine

UN emergency relief fund has ‘never been more critical’: Guterres

The US will impose tariffs on Mexico, says President Trump

How to beat gender stereotypes: learn, speak up and react

Hunger in Yemen: WFP considers aid suspension in face of repeated interference by some Houthi leaders

Depression is the no. 1 cause of ill health and disability worldwide

Multilateralism must weather ‘challenges of today and tomorrow’ Guterres tells Paris Peace Forum

Facebook and Google to treat Europe as the 51st State of the USA

Why economic growth depends on closing the interview gap

“For my children Italy will be an innovation lab and not a museum”; the Sting reports live from World Economic Forum 2015 in Davos

Four years on and half a billion dollars later – Tax Inspectors Without Borders

The world’s coastal cities are going under. Here’s how some are fighting back

Gender Equality Index 2019: Still far from the finish line

Mergers: Commission approves Varta AG’s acquisition of Energizer’s divestment business, subject to conditions

The Fourth Industrial Revolution is redefining the economy as we know it

Assembly of European Regions @ European Business Summit 2014: Made in Europe – Made of Regions

No barriers to free flow of non-personal data in the EU

Trump beats Clinton but Americans will learn the hard way that the US can’t change with an election

More beehives and beekeepers thanks to EU support

Alarming number of Ebola deaths in DRC a ‘rallying cry’ to scale up treatment

This is where people work the longest – and shortest – hours

UN chief sends condolences to families of Malawi flood victims

How to get ageing populations to invest in their health

MEPs list conditions for new EU-Azerbaijan deal

Top UN court rules it has jurisdiction to hear Iranian claim against US over frozen assets

Netherlands: Budget MEPs back €1.2m in job-search aid for 450 redundant workers

Crop yields are up in Syria, but higher prices still cause major strain: new UN report

Factories are no longer the sure route to prosperity. Here’s why

Spending another 3 billion euros on Turkey feels better than admitting EU’s failure

Canada leading the way on women’s inclusion and empowerment, says OECD

Irish Presidency: Not a euro more for EU budgets

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s