China Reduces Rare Earth EL Quota by 11% for 1H2011

Chinese government released the first export license (EL) of rare metals for 2011. The rare earth quota was set at 4,446 tonnes for 31 exporters including foreign capital companies, decreasing by 11% from the officially announced first quota in 2010. Compared with the total first quota in 2010 including foreign capital exporters, the EL was actually reduced by 35%.

The annual quota of rare earths for 2010 totaled approximately 30,000 tonnes including foreign capital exporters, which decreased by about 40% from 50,000 tonnes in 2009. Rare earths are used for permanent magnets, secondary batteries or additives. Chinese government has shrunk its rare earth EL quota to secure materials for domestic market. The government even clearly showed the regulating stance this time.

Rare earth market prices are surging due to China’s export regulation policy. Metallic neodymium price is recently reaching US$ 100 per kilogram, more than triple of a year earlier. The market price jumped by more than 10 times for cerium oxide though the material is relatively abundant among rare earth elements.

Meanwhile, the first export quota for 2011 was increased by 10% to 11,955 tonnes for tungsten and by 5% to 40,969 tonnes for antimony. The quota of tin products decreased by 14% to 11,340 tonnes. Molybdenum was set unchanged at 25,007 tonnes and indium at 140 tonnes.