Friday, September 7, 2012

China Raises Rare-Earth Export Quota

China's decreasing export quota
NEW YORK (WSJ) - For the first time since 2005, the Chinese Government reduced its restrictions on rare-earth exports.  China's Ministry of Commerce reported that they now export 2.7 percent more volume of rare earth, equivalent to 30,996 metric tons, than in 2011.  The tighter limits imposed by China in 2005, led to price surges two years ago leaving some of the exported elements more valuable than gold.  A complaint filed with the World Trade Organization by the U.S., the European Union, and Japan, and accepted in July of this year, put pressure on China to lower their restrictions during a time when other trade disputes exist between China and the U.S. ranging from cars to solar panels.  However, industry observers believe that China's rare-earth exports are less important because manufacturers are looking to reduce their use of Chinese-produced minerals.    Colorado based company, Molycorp Inc., said they will be producing rare earths at a rate of 19,050 metric tons annually by the end of this year.  Molycorp Inc. believes that rare-earth oxide production could fall by 20 percent this year causing China's concern to be production quotas and not export quotas. 

Comment: China is continuing to see a decrease in the exports, which is currently less than their quota.

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