|By China Market Research Reports||Posted in - Friday, August 24, 2012|
The market for Rare Earth Elements showed no significant change after China government announced to remove the export restrictions on REE volumes. The price of REE remained stagnant for the entire week, showing no response to the news from the Chinese Market.
Since 2005, changing its’ stand for the first time, China’s government has permitted higher export volumes for rare earth elements, and have decided to raise the export limits by 2.7% percent from 2011. The new revised export volume now stands at 30,936 metric tons. However, experts opine that cause for no reaction from the market can be largely attributed to trends observed during the period of 2009 – 2012. Chinese exporters have not been able to meet the earlier exports limits due to sharp drop in global demand and other economic forces, which have made export restrictions insignificant.
Economical changes such as rising domestic industrial demand and drop in production capacity, due to stringent regulations which have affected domestic mining industry, too have collectively contributed towards exports limits not being met. The lack of surplus production quotas has negatively affected the export shares.
Some of the biggest REE producers in China have observed a decline in their profits, largely escalated by recession induced dip in global demand and subsequent drop in prices. The global economy slump has not only significantly brought down the demand for rare earth element products, but also further forced industries to look for substitute products or minimize their REE requirements.
The new discoveries have further reduced industrial dependence on REE products which are expensive and in extremely limited supplies. One such development was of Samarium-Cobalt Magnet by Toshiba, which has high iron concentration and is Dysprosium free. Dysprosium is a highly expensive REE and available in scarce quantities. Buyers and suppliers of REE products such as Cerium, Neodymium, etc. are still following wait and watch approach till clear directions are received.
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