China to launch rare earth trading platform in Aug: paper

SHANGHAI Thu Jul 12, 2012 12:22am EDT

Related Topics

SHANGHAI (Reuters) - China will launch its first spot trading platform for rare earths on August 8, state media reported, in the country's latest effort to improve price discovery and regulate the market better.

The platform, led by China's largest producer Baotou Steel Rare-Earth Hi Tech, will only allow physical trading, the Shanghai Securities News said, without citing sources.

China accounts for more than 95 percent of the global output of rare earths, a group of 17 minerals used in the electronics, defense and renewable energy industries.

But Beijing has cracked down on illegal mining, imposed strict production caps and set export quotas, saying that excessive production over the last decade has severely depleted its reserves, damaged its environment and dragged prices down to artificially low levels.

Despite a 30,184 metric tons (33, 272 tons) export quota in 2011, China says it shipped only 18,600 tonnes last year. The squeeze on supply has led, in part, to a fourfold increase in export prices over the past two years.

The government has said the quota will remain steady in 2012.

As a result of the curbs, the European Union has said foreign firms pay up to twice as much as Chinese firms for rare earth metals.

China recently set up a rare earth industry association and is also launching a national strategic rare earth reserve to give it more say over the way the materials are priced.

In March, the European Union, United States and Japan complained to the World Trade Organization that Beijing illegally choked exports while holding down prices for domestic manufacturers.

China has denied the charges, saying product quality variations account for the price gap between the metals it produces for export and domestic use.

In a similar case on raw materials in January the WTO ruled against China, saying that environmental protection was only a valid reason to curtail exports if China was giving the domestic and international markets equal treatment.

(Reporting by Ruby Lian and David Stanway;Editing by Clarence Fernandez)

FILED UNDER:
We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
Comments (1)
InlandTaipan wrote:
Time for some other countries to start looking for and mining the rare minerals that are in their countries.
china will do nothing but try and succeed in controlling its minerals and if they allow any other country to buy them they will charge such high prices that it won’t be funn.
The sooner the rest of the world learnws it needs china for absolutely nothing at all, the better off these countries will be.
china is for china and china only.
They could care less about the rest of the world.
china is for china and nobody else.

Jul 12, 2012 10:01am EDT  --  Report as abuse
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

Photo

California's historic drought

With reservoirs at record lows, California is in the midst of the worst drought in decades.  Slideshow