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.

the sting Milestones

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

Parliament pushes for cleaner cars on EU roads by 2030

Cities: a ’cause of and solution to’ climate change

5 amazing people fighting to save the oceans

Brexit: Six more months of political paralysis or a May-Corbyn compromise?

The Recruitment of Children as Soldiers Explained

How to build a better world for heart health after COVID-19

This start-up is making a palm oil alternative from used coffee grounds

UN health agency identifies 5-year-old Congolese boy as first confirmed case of Ebola in Uganda

UN launches ‘South-South Galaxy’ knowledge-sharing platform in Buenos Aires

Ministers for Youth miss the opportunity to improve social inclusion of young people

Does the EU want GMOs and meat with hormones from the US?

I went blind at age 5, but managed to stay in education. We must ensure 93 million children with disabilities get the same chance

How to change the world at Davos

Teen activist Greta Thunberg arrives in New York by boat, putting ‘climate crisis’ in spotlight

A Sting Exclusive: “China is Making Good Stories not Bad Ones”, Ambassador Yang highlights from Brussels

Ninja innovation and the future of work

The German automotive industry under the Trump spell

Improving coverage of mental health services

25 years after population conference, women still face challenges to ‘well-being and human rights’, says UN chief

NextGenerationEU: Commission presents next steps for €672.5 billion Recovery and Resilience Facility in 2021 Annual Sustainable Growth Strategy

How a new encryption technique can help protect privacy amid COVID-19

Thoughtful blockchain implementation is key to improving supply chains in a post-COVID world

4 simple ways to make your holiday season more sustainable

Azerbaijan chooses Greek corridor for its natural gas flow to EU

Migration crisis: how big a security threat it is?

EU is officially in recession

These 5 charts show our shifting behaviour around coronavirus

Safety fits into our palms: The role of mobile technology in healthcare systems and life saving

Eurozone: Economic Sentiment Indicator recovering losses

FROM THE FIELD: ‘Harvested’ rainwater saves Tanzanian students from stomach ulcers, typhoid

Thank you COVID-19

European Court rules that ECB’s OMT program of 2012 is OK; not a word from Germany about returning the Greek 2010 courtesy

Mergers: Commission clears acquisition of Refinitiv by London Stock Exchange Group, subject to conditions

UNESCO lists wrestling, reggae and raiho-shin rituals as global treasures to be preserved

Importance of Mental Health and keeping it together in a Pandemic 

UN calls for support to implement Central Africa’s newly minted peace agreement

July was the hottest month ever – what does that actually mean?

First EU collective redress mechanism to protect consumers

EuroLat: serious concern about migration and support to multilateral trade

Who will secure Lithuania?

How to build a paradise for women. A lesson from Iceland

These countries have the most expensive childcare

Why we need a Paris Agreement for nature

Social, cultural diversity ‘an enormous richness, not a threat’ Guterres declares calling on investment for a harmonious future

Female directors reached record highs in 2019 Hollywood

Privatisation and public health: a question of Human Rights

Venezuela: UN human rights office calls for ‘maximum restraint’ by authorities in face of new demonstrations

Death as a Global Public Health Issue

Student-to-Tutor Ratio: if things are to change, why not for the better?

With 5 billion set to miss out on health care, UN holds landmark summit to boost coverage

‘Ghost fishing’ is threatening our oceans. Here’s how we can tackle it

Commission launches debate on a gradual transition to more efficient and democratic decision-making in EU tax policy

8 female CEOs on bridging the gender gap in tech

COVID-19: MEPs extend relief measures for the transport sector

China’s impact as a global investor; the Sting reports live from World Economic Forum 2015 in Davos

Ride-hailing apps are making the developing world’s traffic problems worse

Multilateralism’s ‘proven record of service’ is focus of first-ever International Day

‘Provocative actions and inflammatory rhetoric’ destabilizing Middle East, warns top UN official

Britain in and out of the EU

Why we need artists who strive for social change

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