China’s Rare Earth Exports drop but Prices rebound

RareMetalBlog-China-News-208AChina’s export volume of rare earth minerals in January 2013 – as released by the China Customs Statistics Information Center this week – totaled 1,092 metric tons, which represents a 37.6 % drop year-on-year. The average export price was USD$ 25,540.9/ton, and the total export value plunged 81.6 %, as compared to December 2012, to USD$ 27.89 million. Last month, China exported 3,252 metric tons of rare earth ore, metals and compounds, while the total export value was $91.93 million.

In January, 2013, other rare earth processed products accounted for a total 2,866 metric tons in exports, down 22.1 % year-on-year with an average export price of USD$ 58,275.65/ton. China’s rare earth exports of traditional processed products amounted to 5,112 metric tons at an average export price of USD$ 44,734.15/ton. In 2012, the rare earth processed products export volume from China was 41,548 metric tons, down 26.1 % year-on-year, according to official data.

The Customs data showed – due to declining demand from the world’s major rare earth customers – that China’s export of rare earths remains sluggish even if the export price of rare earth processed products showed a substantial rebound in January.

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Despite the Chinese government announcing the 2013 first-batch exports, in the first six months of which it will allow exports of 15,499 metric tons of rare earth resources, it will pursue a policy to stabilize the stable rare earths export quota policy in the year. However, given China’s rare earth export restrictions, in fact, the country’s rare earth export volume is bound to follow a downward trend. Due to the major role played by the country’s state-owned rare earth producers, it is impossible to adopt a rare earths price-cutting policy in order to monopolize the world’s market again. The Chinese government prevents this, meaning that the amount of rare earths exported legally from China will be reduced. Moreover, as the world’s major importers of rare earths (USA, Japan, and EU), which are striving to diversify supply and reduce dependence on China’s rare earths because of national security concerns, has stimulated development of new rare earths sources in the rest of the world.

“If the government’s export quota policy were lifted now, China’s rare earth mining and exporting would be out of Control again, which would not lead to a sustainable and viable climate for the rare earth industry.” said Chen Zhanheng, deputy secretary-general for the Chinese Rare Earth Industry Association.  I agree with him.

Meanwhile, after a four month suspension of rare earth roasting and smelting operations, on February 23, 2013, China’s leading rare earth producer, Baotou Steel Rare Earths resumed producing and supplying in the domestic market even if the Company faces new challenges due to lower rare earth exports in January.


  1. I have been hearing from a number of sources that China has been quite successful in clamping down on illegal mining of REE – and therefore, presumably, of illegal exporting. If that is the case, does that not mean demand has actually fallen further than the official figures show?

    • Robin,I have just finished reading your lastest piece,If Dudley Kingsnorth really says,” you won’t be able to buy rare earths from China.” I think this is a complete wrong perspective,because the white paper said China will continue its rare earth supply to the international market.

      In 2012,China’s actually output mining of REE should be more than 150,000 tons,including
      1),the government’s mining quota was 93,250 metric tons.however,all the producer’s actually output should be about 100,000 metric tons.
      2),the Chinese government confiscated more than 38,600 metric tons of illegally mined rare earth products.
      3),the others illegal mining of REE.It could not be able to calculate the amount at present.but the most careful conservative estimate,I think the number must be more than 10000 metric tons.

      • What happened to the 38,600 metric tons of illegally mined rare earth products confiscated by the Chinese government? I.e., where is it now? Was it stockpiled by the government?

    • Thanks Tim,
      the white paper, the English-language version “1.2-fold”,in the Chinese,it means
      1.2 times,( 120% of them),so the smuggled out of China=18,600X120%=22320 tons.
      I think some factors should be taken into account,such as to buy the smuggled rare earth as a stockpile.

  2. Hongpo,
    Interesting to hear Baotou has resumed secondary processing. Are you suggesting this is limited to the domestic market rather than export?
    Do you have any update on the trading platform, as Baotou was suggested as the major player?
    Thnx, appreciate your inputs.

    • Hello Tim,

      1),Baotou Steel Rare-Earth (Baotou),their first batch of export quota was 1696 metric tons of light rare earth Oxides and 115 metric tons of heavy rare earth Oxides.they will continue to export their rare earth productions,include the rare earth Oxides.
      2),About the trading platform,if I get the latest news, I will update immediately.

      Thanks again.

      Best Regards

  3. Why in heaven’s name would you agree with the Chinese official who says, “If the government’s export quota policy were lifted now, China’s rare earth mining and exporting would be out of Control again”?

    Demand is less than half the quota. I don’t see how lifting the quota would make exports “out of control”. Not only is there a lack of facts and of elementary economic logic his assertion, but there is a disturbing attitude that free trade must be Controlled. China’s basic flaw — economic capitalism with political communism — seems to be at work here.

  4. Hi Hongpo,

    I cannot see how the Communist Government bureaucrat is correct. To use illegal mining as an excuse for export quotas shows false reasoning, for illegal mining can be regulated just by domestic laws alone. To blame foreign customers for Chinese domestic illegal mining, which export quotas do, is irrational and harmful to international relations.

    REE exports from China have collapsed, a fact due in part to the Communist Party’s REE export policy, for foreign customers need absolute assurance of supply, which the quotas undermine. Moreover, international free trade would allow the market to find its proper price level, so that the Chinese mining industry would be able to plan rationally, not according to unrealistic projections that some committee has manipulated (as committees always do). An artificial price level will harm Chinese industry as well as foreign industry.

    Free trade, not managed trade, has brought wealth to China, and it should trust free trade in the REE sector.

    Bob M

    • Hi,thanks Bob,
      “Free trade” is not free trade,”Free trade” does not mean unregulated.In actual practice, however, the world has never had a completely free trading system, “Free trade” is still just a dream.

      1),China has an annual capacity of over 320,000 tons at present.Causing serious disorder of to the rare earth export business,the Chinese government need to exercise strictly control the total amount of rare earth mining and production,as well as improving the regulation of rare earth exports.

      2),the global rare earth supply should diversity, and not in a single as in the past to rely on China.
      3),Despite export controls,the country set an export quota of about 30,000 tonnes for rare earth products every year,China has met global market demand, as well as the white paper said China will continue its rare earth supply to the international market.
      4),As rare earth prices goes up because of the restriction of export,China’s rare earth export quotas policy,which lead directly to promote global rare earth supply diversification.

      Therefore,China’s rare earth export quotas policy,in fact,not only to protect the country’s environment,but also promoting the development of the global rare earth industry.

      Kind regards,

  5. Thank you, Hongpo. I think we should agree that we disagree about free trade and let it go at that. But thanks for the responses.

    As we say in English, there are many ways to skin a cat, and perhaps China’s approach will work out.

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  7. Hongpo, can you explain this to me please ….

    I have read reports where the it’s estimated that illegal exports of rare earths are at 120% of the official legal figures …. which means China is still supplying the Western World

    As I understand it – you need specialist facilities to seperate out the rare earths – especially the heavies .. now if that is the situation the Chinese government would know where these facilities are, – so if they wanted to “really” stop illegal rare earth smuggling out of China – you would think they easily could.

    Hongpo – tell me why do you think the Chines have permitted the production and hence the illegal smuggling of rare earths to continue

  8. Hongpo, thanks again for your insights. When you say China has an annual capacity of 320,000 tonnes right now, how much separation capacity do you estimate it has? How much HREO or HREE separation capacity?

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