The rare earth industry or the current change industry needs to be treated rationally

Recently, it was reported that the interim report completed by the World Trade Organization (WTO) Dispute Settlement Mechanism Expert Group ruled that the United States, Japan and the European Union should be in line with the demands of China's rare earth export restriction policy violations. China will be forced to adjust the existing rare earth export quota policy and rare earth export tariffs.

Soon after the news came out, some media reported that China is brewing a number of new policies to deal with changes in the industry, including cracking down on private mines, introducing the Regulations on the Management of Rare Metals, and the differential management of different rare earth varieties.

However, industry insiders pointed out that if this "combination boxing" is to be beautiful, the government needs to do more "warm-up" and the industry needs to look at it rationally.

Pressure from WTO litigation

For a long time, disorderly mining, destruction of ecology, and low-cost exports are the ills of China's rare earth industry. However, the economies of the United States, Europe, and Japan do not care about China's environmental problems and have repeatedly attacked.

Since the EU proposed in 2009 that China lift its export quota system for rare metal products, countries have begun to take various actions to obtain rare earth exports from China, with the intention of obtaining cheap rare earths.

Wei Qining, a researcher in the metallurgical industry of China Investment Consulting Co., believes that in the future, China's rare earth industry will present a situation of “having wolves and tigers outside”. He said: "Because of the pressure of the adjustment of the rare earth export system, the quota system and export tariffs will be open. This will not only lead to the resurgence of problems that are being rectified, but also smuggling and trafficking will be lifted. Opening up will exacerbate industry dilemmas."

Wang Qinhua, vice president of China Nonferrous Metals Industry Association and vice president of China Rare Earth Industry Association, said in public: "The WTO litigation involving rare earths is nearing completion. The cancellation of rare earth export quota management will also be mentioned on the agenda after the case is over. Start with light rare earths."

The gradual opening of exports from light rare earths may inhibit the danger of heavy rare earth outflow.

In addition to China, light rare earths are also distributed in the United States, Russia, Australia, India, South Africa and other countries, and there are more reserves. However, more than 70% of the world's heavy rare earths are concentrated in the south of China. In the high-tech field, heavy rare earths have the effect of light weight and improving the quality of electronic products. Many of China's heavy rare earths are unique rare minerals, and heavy rare earth elements such as lanthanum and lanthanum can only be mined for 30 years.

Industry consolidation sees results

The news of the WTO ruling will make a huge change in the environment for the export of rare earths in 2014. The time left for the Chinese government to respond is not as long as the market expects, which has forced the deepening of the governance policy for the rare earth industry to accelerate. The rectification of the industry and the many new policies brewed in the legend are all preparations for the warm-up of the WTO rare earth case.

According to Zhang Beibei, an analyst in the rare earth industry, after the rectification, the illegal export of rare earths has been converged, and the irregular trading of rare earths has decreased. Some enterprises have begun to sell only rare earths with special invoices for rare earths. Orders for rare earths also increased in July and August.

The recently released Baosteel rare earth listing price and the news of the purchase and storage led to market participants' good expectations. Zhang Beibei believes that some merchants have already raised the price of some oxides, such as cerium oxide, cerium oxide and cerium oxide, in different degrees. With the expected improvement, the price of rare earths is likely to rise in November, but the increase and maintenance time depends on whether the national purchasing and storage policies are actually implemented and implemented, and whether there are other policies that are favorable.

Zhang Beibei said: "The state has made the exploitation, production and management of resources more centralized and effective through macroeconomic regulation and control. In any case, the export price has a bottom line."

A person from the China Rare Earth Society said that the state does not introduce special policies for large state-owned enterprises. “A number of policies have improved the entry barriers for rare earth enterprises, but in order to fight black, optimize industrial structure and develop high technology.”

Need to be treated rationally

As for the rebound in prices, the above-mentioned people believe that the price recovery is a short-term phenomenon, and there are many factors affecting the price of rare earth, including supply and demand, mining at home and abroad, etc., which need to be treated rationally.

Zhang Beibei also believes that only the price increase supported and promoted by demand is the real market. "In the past two years, the overall price of rare earth has been falling all the way. In addition to the previous high price and large downside, the main reason is that demand is small."

“Some rare earth enterprises report that there are not many orders for rare earths and low profits. The upstream and downstream enterprises of rare earths generally face problems in pricing and production costs and risk management.” Zhang Beibei said that the most important issue at present is weak terminal consumption. And this is closely linked to the economic environment.

According to industry insiders, since the price of rare earth has risen sharply in 2011, many downstream companies have collapsed. At present, the overall global demand is sluggish. Although the rectification has certain effects, the black industry chain still exists. “The key is to ensure that the upstream enterprises of the rare earth industry and the downstream enterprises develop together, and the state must encourage enterprises to develop high and new technologies in a targeted manner. This is another long-term process.”

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