China’s exports of vital rare earth elements used for numerous high-tech goods slipped almost one-tenth last year but the overall value rocketed as quota cuts lifted international prices, data showed on Wednesday.
China, which produces about 97 percent of the global supply of the minerals, cut export quotas for the minerals by 40 percent last year, a move that alarmed buyers and trading partners.
It has cut export quotas for the first half of 2011 by 35 percent from the first half of last year, although total quotas for this year have not yet been announced. China says the quota cuts will prevent reckless and polluting mining of deposits, Reuters reports.
China’s moves have raised heckles in major trading partners such as the United States, European Union and Japan. The US Trade Representative office threatened last month to take China to the World Trade Organization about its export restraints.
The rare earths issue adds to the growing list of trade-related disputes between China and the United States, including US complaints that China’s currency is undervalued, as President Hu Jintao starts a state visit to Washington.
China exported 4 738 metric tons of rare earth metals, ores and compounds in December, more than twice as much as in November, bringing its full-year export volume to 39 813 metric tons, according to data by China Customs Statistics (CCS) Information Center, Hong Kong, an authorized supplier of Chinese customs figures. (www.eiahk.com/consult_e.html)
The export figures were well above the 2010 quota of 30 258 metric tons. The additional exports may reflect shipments early in the year that were registered under unused 2009 quotas.
Low international demand for rare earths in 2009, thanks to the financial crisis, may have contributed to the decision to drastically cut 2010 quotas. But by the time the cuts were announced in the summer, demand had recovered and trading was thrown into disarray.
US makers of high-tech products such as Apple Inc’s iPads and various Japanese companies have been scrambling to secure reliable supplies of the minerals outside of China as Beijing steadily reduces export allocations.
EARNING MORE FOR LESS
As volumes shipped out of China have dwindled, the value of trade has soared. December’s tonnage was down by almost two-thirds from December 2009, but the value rose four-fold to $309.2 million on a free-on-board basis.
That has helped meet other goals of China’s policy of controlling exports of rare earths and other minor metals — to raise their price internationally and lure more secondary industry to set up shop in China.
The value of 2010 exports soared to US$939.7 million, three times the US$310.1 million China earned from the trade in 2009.
December’s exports were valued at an average of US$65,257 per metric ton, the culmination of five months of rapid price increases. In July, the value per metric ton was US$14,405 but that figure rose by an average of more than US$10,000 in successive months.
On Tuesday, Chinese Commerce Ministry spokesman Yao Jian reiterated that the government had yet to decide full-year quotas for rare earths.
“China will continue to supply rare earths to the international market and manage export quotas in accordance with WTO regulations,” Yao said, adding the 2011 full-year quota would be announced “in a timely manner.”
He also welcomed moves by the United States and Australia to increase their own production of rare earths, something which has picked up pace since China began cutting its exports.
“This will effectively safeguard global supplies,” Yao said.
China is also stepping up its controls over rare earths mining and plans to release new industry standards to combat the extremely polluting practices of its miners.
The Ministry of Land and Resources said on Tuesday that it would set up special zones to better regulate rare earths mining.
Wind turbines and hybrid cars are among the biggest users of rare earth minerals, a little-known class of 17 related elements that analysts say are facing a global supply crunch as demand swells. The minerals also are used in some weapons systems.