Smuggling putting brakes on price of vital rare earths
By Richard Fu |
August 22, 2012, Wednesday
|
Print Edition
Print Edition
MORE of China's rare earths, key elements in high-tech products such as hybrid cars and smart phones, were smuggled out of the country last year than legitimately exported.
Exports fell nearly a quarter in July, official data showed yesterday, but rampant smuggling of the key minerals remains a major concern. China is the world's No. 1 supplier of rare earths.
Exports of rare earths in the forms of ores, metals and compounds fell 23.6 percent to 3,746 tons in July from a year earlier, according to a customs report yesterday. Exports declined 36.7 percent to 21,729 tons in the first seven months.
Rare earths are a group of metallic elements vital in the manufacture of an array of high-tech products including missiles, wind turbines, hybrid cars and smart phones.
The falling shipments underscored government controls on the sector by imposing production caps and export quotas, and stricter environmental rules after rampant exploration and mining had taken its toll on the nation's environment.
China has about 23 percent of the world's rare earth reserves but supplies more than 90 percent of world demand. Prices had surged for years, worrying China's trade partners such as the United States and Japan, before a pullback over the past year.
Smuggled amounts were 1.2 times China's official export volume in 2011, Xinhua news agency reported yesterday, citing Ma Rongzhang, secretary general of the Association of China Rare Earth Industry.
Though demand is solid and China is tightening controls, rare earth prices have fallen about 70 percent over the past year. That's in part because of the illegal exports, Xinhua said, citing industries officials including Zhang Anwen, secretary general of the rare earths industry association of Inner Mongolia, China's largest producing region.
Some domestic players have fallen victim to the current situation. Shanghai-listed Baotou Steel Rare-Earth Hi-Tech Co, China's largest rare earths producer, said first-half net profit fell over 20 percent due to falling prices and weakening exports.
Xinhua said Chinese customs uncovered 10 major rare earths smuggling cases last year but illegal exports were still rampant.
Industry officials say customs should improve tariff regulations for rare earths as some resources are currently being exported in the name of other items rather than rare earths or rare earths-related materials, leaving a loophole.
China has repeatedly said it will continue to tighten regulation of the industry to protect the environment and conserve resources, even as the US and Japan filed complaints to the World Trade Organization that the restrictions broke global rules as they gave Chinese users an unfair advantage.
China denies the claims.
Exports fell nearly a quarter in July, official data showed yesterday, but rampant smuggling of the key minerals remains a major concern. China is the world's No. 1 supplier of rare earths.
Exports of rare earths in the forms of ores, metals and compounds fell 23.6 percent to 3,746 tons in July from a year earlier, according to a customs report yesterday. Exports declined 36.7 percent to 21,729 tons in the first seven months.
Rare earths are a group of metallic elements vital in the manufacture of an array of high-tech products including missiles, wind turbines, hybrid cars and smart phones.
The falling shipments underscored government controls on the sector by imposing production caps and export quotas, and stricter environmental rules after rampant exploration and mining had taken its toll on the nation's environment.
China has about 23 percent of the world's rare earth reserves but supplies more than 90 percent of world demand. Prices had surged for years, worrying China's trade partners such as the United States and Japan, before a pullback over the past year.
Smuggled amounts were 1.2 times China's official export volume in 2011, Xinhua news agency reported yesterday, citing Ma Rongzhang, secretary general of the Association of China Rare Earth Industry.
Though demand is solid and China is tightening controls, rare earth prices have fallen about 70 percent over the past year. That's in part because of the illegal exports, Xinhua said, citing industries officials including Zhang Anwen, secretary general of the rare earths industry association of Inner Mongolia, China's largest producing region.
Some domestic players have fallen victim to the current situation. Shanghai-listed Baotou Steel Rare-Earth Hi-Tech Co, China's largest rare earths producer, said first-half net profit fell over 20 percent due to falling prices and weakening exports.
Xinhua said Chinese customs uncovered 10 major rare earths smuggling cases last year but illegal exports were still rampant.
Industry officials say customs should improve tariff regulations for rare earths as some resources are currently being exported in the name of other items rather than rare earths or rare earths-related materials, leaving a loophole.
China has repeatedly said it will continue to tighten regulation of the industry to protect the environment and conserve resources, even as the US and Japan filed complaints to the World Trade Organization that the restrictions broke global rules as they gave Chinese users an unfair advantage.
China denies the claims.
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