China announced on Tuesday it will cut its export quotas for rare earth minerals by more than 11 percent in the first half of 2011, further shrinking supplies of metals needed to make a range of high-tech products after Beijing slashed quotas for 2010.
China produces about 97 percent of rare earth elements, used world-wide in high-technology, clean energy and other products that exploit their special properties for magnetism, luminescence and strength. The rare earth issue may further strain relations between China and the United States, which have been battered this year by arguments over everything from Tibet and Taiwan to the value of the Chinese currency. Chinese President Hu Jintao is due to visit the United States next month.
China's Commerce Ministry allotted 14,446 tonnes of quotas to 31 companies, which was 11.4 percent less than the 16,304 tonnes it allocated to 22 companies in the first half of 2010 quotas a year ago. China slashed the export quota by 40 percent in 2010. The export restraints on rare earths has inflamed trade ties with the United States, European Union and Japan in particular. In Washington, the US Trade Representative's office expressed concern over the latest announcement.
We have raised our concerns with China and we are continuing to work closely on the issue with stakeholders," a USTR spokeswoman said. Last week, the trade representative's office said China had refused US requests to end export restraints on rare earths, and that the United States could complain to the World Trade Organisation, which judges international trade disputes.
After China's announcement, shares of Molycorp Inc, the Greenwood, Colorado-based company that owns a rare earth mine in California, were up 10.5 percent to $54.69 in early trading. Wind turbines and hybrid cars are among the biggest users of rare earth minerals, which analysts say are facing a global supply crunch as demand swells.
This little-known class of 17 related elements is also used for a vast array of electronic devices ranging from Apple's iPhone to flat screen TVs, all of which are competing for the 120,000 tonnes of annual global supply. In a short statement on its website (www.mofcom.gov.cn), the Chinese Commerce Ministry said it had added more producer companies to the quota list, but cut volumes allocated to trading companies.
Japan has been hard hit by the export curbs. Japanese imports of rare earths shrank further in November, reflecting the impact from China's de-facto ban on shipments of the minerals that was lifted late last month.
Comments
Comments are closed.