I've been keeping track of this for a while and I just wrote another short blog post on the topic so I figured I'd post it. You can read it at: http://420trader.net/?p=660
China is starting to step up their game in the global arena. After all the shit talking against China, China has begun halting exports of its grip on rare earth minerals. After a bout with Japan, they halted exports of rare earth minerals to Japan. Now they are halting certain exports of rare earth minerals to the USA and Europe.
China's grip on rare earth metals
--I hope this is in the right forum, I figured it's a business forum and this is a very important topic.
China is starting to step up their game in the global arena. After all the shit talking against China, China has begun halting exports of its grip on rare earth minerals. After a bout with Japan, they halted exports of rare earth minerals to Japan. Now they are halting certain exports of rare earth minerals to the USA and Europe.
China, which has been blocking shipments of crucial minerals to Japan for the last month, has now quietly halted shipments of those materials to the United States and Europe, three industry officials said on Tuesday.
The Chinese action, involving rare earth minerals that are crucial to manufacturing many advanced products, seems certain to further intensify already rising trade and currency tensions with the West. Until recently, China typically sought quick and quiet accommodations on trade issues. But the interruption in rare earth supplies is the latest sign from Beijing that Chinese leaders are willing to use their growing economic muscle.
“The embargo is expanding” beyond Japan, said one of the three rare earth industry officials, all of whom insisted on anonymity for fear of business retaliation by Chinese authorities.
The Chinese action, involving rare earth minerals that are crucial to manufacturing many advanced products, seems certain to further intensify already rising trade and currency tensions with the West. Until recently, China typically sought quick and quiet accommodations on trade issues. But the interruption in rare earth supplies is the latest sign from Beijing that Chinese leaders are willing to use their growing economic muscle.
“The embargo is expanding” beyond Japan, said one of the three rare earth industry officials, all of whom insisted on anonymity for fear of business retaliation by Chinese authorities.
China has a firm grip on the worlds supply of rare earth metals, supplying 90-95% of the world’s demand for the metals. You can read more about it from an older post of mine here. But it is no mystery why China would use their grip on rare earth metals for blackmailing and slow down their exports of the metals – their supply may only last another 10-15 years:
China’s medium and heavy rare earths reserves may last 15 years to 20 years at the current rate of production, possibly requiring imports, the Ministry of Commerce said today.
Domestic rare earths deposits dropped to 27 million metric tons by the end of 2009, or just 30 percent of the world’s total known reserves, from 43 million tons, or 43 percent of the world total, in 1996, Chao Ning, section chief of foreign trade at the ministry said at a Beijing conference.
China, controller of more than 90 percent of production of the materials used in cell phones and radar, cut its export quotas by 72 percent for the second half and reduced output, spurring a trade dispute with the U.S. The country may not be able to meet growing global demand as the government continues to curb output, Lynas Corp. said in March.
“We cannot rule out the possibility that China may need to rely on imports sometime in the future for these minerals, instead of supplying the world,” Chao said.
Domestic rare earths deposits dropped to 27 million metric tons by the end of 2009, or just 30 percent of the world’s total known reserves, from 43 million tons, or 43 percent of the world total, in 1996, Chao Ning, section chief of foreign trade at the ministry said at a Beijing conference.
China, controller of more than 90 percent of production of the materials used in cell phones and radar, cut its export quotas by 72 percent for the second half and reduced output, spurring a trade dispute with the U.S. The country may not be able to meet growing global demand as the government continues to curb output, Lynas Corp. said in March.
“We cannot rule out the possibility that China may need to rely on imports sometime in the future for these minerals, instead of supplying the world,” Chao said.
It seems that the “currency war” may develop into a trade war – which usually ends up in physical war. Let’s hope it doesn’t end that way.
--I hope this is in the right forum, I figured it's a business forum and this is a very important topic.
