China Releases Second Round of 2013 REE Export Quotas

Source:

"Last week, the Chinese Ministry of Commerce (MOFCOM) announced the second round of allocations of rare-earth export quotas for 2013."

China Rare earth export quotas 2013

Last week, the Chinese Ministry of Commerce (MOFCOM) announced the second round of allocations of rare-earth export quotas for 2013, to companies operating in China. This follows the initial announcement outlining the first allocation for 2013 in December 2012.

A total of 15,500 t of export quotas was allocated in this second round, comprising 13,821 t of light rare-earth (LRE) products and 1,679 t of medium / heavy rare-earth (M / HRE) products, bringing the total for 2013 to 30,999 t. This is almost identical to the 2012 total of 30,996 t.

Let's now take a look at the allocation numbers associated with this week's announcement, before reviewing them in the context of the full year's allocations, and those of recent years. The companies below, highlighted in green are Chinese / non-Chinese joint-venture (JV) companies - the rest are Chinese-owned. The list is sorted from highest-to-lowest total allocation:

Second set of allocations of rare-earth export quotas, issued to
individual companies for 2013. Source: Chinese Ministry of Commerce
Exporting Company Allocation (tonnes)
LRE M/HRE Total
Baotou Rhodia Rare Earth Co. 1,020 65 1,085
Gansu Rare Earth New Materials Co. 881 72 953
China Nonferrous Import-Export Co. Jiangsu Branch 758 137 895
Grirem Advanced Materials Co. 735 141 876
China Minmetals Corporation* 670 140 810
Yiyang Hongyuan Rare Earth Co. 712 21 733
Yixing Xinwei Leeshing Rare Earth Co. 611 114 725
Ganzhou Chenguang Rare Earth New Materials Co. 660 57 717
Leshan Shenghe Rare Earth Technology Co. 647 56 703
Zibo Jiahua Advanced Material Resources Co. 683 19 702
Guangdong Rising Nonferrous Metals Group Co. 572 79 651
Jiangyin Jiahua Advanced Material Resources Co. 529 118 647
Liyang Rhodia Rare Earth New Materials Co. 489 141 630
Xuzhou Jinshi Pengyuan Rare Earth Materials Co. 546 54 600
Ganzhou Qiandong Rare Earth Group Co. 455 94 549
Inner Mongolia Baotou Steel Rare Earth Hi-Tech Co.** 509 28 537
Baotou Huamei Rare Earth Hi-Tech Co.** 508 29 537
Sinosteel Corporation 462 44 506
Inner Mongolia Baotou Hefa Rare Earth Co.** 444 27 471
Chalco Rare Earth (Jiangsu) Co. 373 96 469
Jiangxi Rare Earth & Rare Metals Tungsten Group Co. 438 6 444
Shandong Pengyu Industrial Co. 378 40 418
Baotou Tianjiao Seimi Rare Earth Polishing Powder Co.** 201 9 210
Huhhot Rongxin New Metal Smelting Co. 155 14 169
Baotou Santoku Battery Materials Co. 159 10 169
Ganxian Hongjin Rare Earth Co.* 132 31 163
Guangdong Zhujiang Rare Earth Co. 83 37 120
Xi'an Xijun New Materials Co. 11 0 11
Sub-Total: Chinese-Owned 9,974 1,189 11,163
Sub-Total: Chinese / Non-Chinese JVs 3,847 490 4,337
Total 13,821 1,679 15,500

* Part of China Minmetals Group, which was allocated a confirmed total of 973 t.
** Part of Baogang Group, which was allocated a confirmed total of 1,755 t.

Here is a comparison of the quota allocations for the past five years:

Export quotas for the Chinese rare-earth industry (tonnes)
Source: Chinese Ministry of Commerce
Year Period Chinese-owned Chinese /
Non-Chinese JV
Sub-Total TOTAL
2009 H1 15,043 6,685 21,728 50,145
H2 18,257 10,160 28,417
2010 H1 16,304 5,978 22,282 30,258
H2 6,208 1,768 7,976
2011 H1 10,762 3,746 14,508 30,246
H2 12,221 3,517 15,738
2012 H1 16,066 5,160 21,226 30,996
H2 6,340 3,430 9,770
2013 H1 11,136 4,363 15,499 30,999
H2 11,163 4,337 15,500

We can see that there has been little change in the total quantity of allocations in the past four years, even if the structure and methods of allocations have evolved. The same companies which were allocated first-round quotas in 2013 also received them in the second round.

Given the projected increases in non-Chinese supply of LREs in 2013 and beyond, it was expected in some quarters that MOFCOM might eliminate export quotas for LREs; while this has not yet happened, it is still a distinct possibility. MOFCOM was apparently at pains to preserve the total export quota numbers in comparison to 2012, perhaps in an attempt to minimize volatility caused by the allocations. Of course, doing so is a case of "too little, too late" given that the rare-earth price increases which peaked in mid-2011, were caused by the rare-earth supply chain mis-interpreting the drop in quotas in 2010 as an actual restriction on supplies from China...

Gareth Hatch
Technology Metals Research

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