Lifton translates Chinese rare earths export volumes and pricing
InvestorIntel’s Publisher Tracy Weslosky sent me an urgent note this weekend that read: “please translate and tell me what this means.” The information she sent me from Asian correspondent Hongpo Shen shows that the dependence of Japan and the US for rare earths upon exports from China — although lessening a bit for light rare earths, perhaps due to Molycorp and even Lynas production, shows a continuing dependence upon China for imports of mid-range and heavy rare earths as chemical compounds, metals, and alloys.
The several predictive reports of supply/demand pricing now on the market have their value for long term planning, but Hongpo has supplied InvestorIntel readers with ACTUAL Jan-Sep, 2014, CHINESE EXPORT VOLUMES AND PRICING.
Hongpo’s text and data are below. Following the text and the data are my calculations of the Jan-Sep 2014 average pricing for rare earths in the form of carbonates, halides, oxides, and metals exported, duty paid from China.
China’s total exports of rare earths by tonnage for October, 2014, declined 2.28% compared year-on-year to October, 2013. There were 2,014 tons shipped in October, 2014. This was after dropping 2.21% in September, 2014 compared year-on-year to September 2013 to 1,957 tons. For 2014 October’s exports value tumbled 27.7% year-on-year compared to October 2013 to $22.314 million. It’s the first time since 2013 that export volume had negative growth for two consecutive months, according to the data from Chinese General Administration of Customs.
For the first ten months of 2014 cumulatively, China’s rare earth exports rose 26.3% year-on-year to compared to 2013 to a total of 22,184 tons. In value terms, however, exports tumbled 21.3% from a year earlier to a cumulative total of $315.101 million owing to falling prices, new customs data showed on November 21st.
China exported approximately 968 tons of rare earths to Japan in October 2014. That amount was up 20.39% year-on-year, compared with October 2013. The October 2014, export was valued at $11.318 million, so the average export price was at $11,692.53 per ton.
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Japan imported a total of 9,504 tons of rare earths from China in the first ten months of 2014. This was an increase of 73.02% from the corresponding period in 2013. Japan’s imports of rare earths from China, accounted for nearly 42.5% of China’s total export amount during the first three quarters of 2014. Of this about 7,745.8 tons were light rare earths and about 774.5 tons were heavy and medium rare earths, Chinese export customs statistics showed.
The US is China’s second-largest rare earth buyer behind the Japanese. The US accounted for nearly 33.9% of China’s total exports of rare earth during the first three quarters of 2014. After dropping 46.05 % in total for 2014, year-on-year, compared to 2013, and with a total of just 469 tons in September 2014, which was an 11% drop from the 529 tons of rare earths imported from China in September 2013. The overall total of rare earths imported from China by the US through October 2014 was down 27.65% compared to the same period in 2013, while these exports were valued at $4.289 million for an average export price of $ 8,108.2 per ton in October 2014. From January to October this year, the US in total imported about 7,442 tons of rare earths from China, which represented an increase of 15.44% over the corresponding period in 2013.
Japan imported a total of 13,197 metric tons of rare earths with 62% of these rare earth from China in 2013, according to the figures from Japan Society of New Metals. Therefore Japan is still reliant on China for its rare earth imports at present.
Compared with Japan, the US may be gradually reducing its dependence on China for light rare earths. In fact, US imports of China’s rare earths are gradually declining in this year, especially as China totally exported only 8120.2 tons rare earth to the US in the last year, a significant reduction compared to the same period in 2012.
According to the Chinese General Administration of Customs, China’s total export of single rare earth oxides rebounded to 12,206.827 tons in the first nine months of the year 2014, up by 19.3% compared with the same period in 2013. The total value of the export of individual rare earth oxides was put at $185.190 million, a decrease of approximately 11.6% year-on-year from the 2013 total for the same 9-month period. In the same 9 months of 2014 the export of rare earth metals rose 26.1% year-on-year with an additional 2,894.915 tons, valued at $64.710 million. There was a decrease in revenue of 35.1% year-on-year. Yet the export of rare earth salts surged 66.7% year-on-year to 5,422.083 tons, valued at $46.681 million, which was an increase in revenue of 19.4% year-on-year. Finally the export of rare earth mischmetal alloy increased 33.3% to 405.405 tons, valued at $4.245million. An increase of revenue of 56.5% year-on-year.
China exported a grand total of 1,471.1 tons of heavy and medium rare earths and 18,593.6 tons of light rare earths in the first nine months of 2014, an increase of 7.5% and 30.3% year on year, respectively.
The following table provides a detailed China’s main rare earth product export statistics for January-September 2014:
I think the readers only really care about the prices ex-China, duty paid, for some of the critical rare earths as oxides, carbonates, halides, and metals so I will only show these (average) prices for Jan-Sep, 2014, calculated from data above supplied by Hongpo:
The prices that I calculated above from the Hongpo data show that the prices for the metals are far above the prices normally shown in the many reports out there. If these numbers are accurate they show that the conversion costs of the rare earth salts to the metal form are the determinative factor for magnet and alloy production. These costs for metals also show that the basket price is at best meaningless and at worst misleading. There can be no basket price for metals! Metals can be produced by metallothermic reduction of molten halides or by electrolytic reduction of molten oxides. Which process is used depends on the chemical properties (particularly the one known as enthalpy) of the rare earth salts involved. Some alloys can also be made by co-reduction, but not all of them. The making of high purity individual rare earth metals is a complex process and therefore costly. The making of alloys to tight specifications requires high purity individual metals and strictly controlled conditions. This type of processing is also expensive.
Japan’s rare earth metals and alloys industry is considered to be the consistently best producer of high quality, tight specification, metals and alloys. However today more and more even of Japanese rare earth metals/alloys production is in China in j/v companies.
The United States where the processes for manufacturing high purity rare earth metals and alloys was pioneered has today no such commercial production whatsoever.
It’s time to restart the US rare earth metals and alloys production industry.
Jack Lifton is the CEO for Jack Lifton, LLC and is a consultant, author, and lecturer on the market fundamentals of technology metals. Technology metals ... <Read more about Jack Lifton>