Chinese rare earth exports, 2009-2011, in metric tons:
| |  2009/H1: | 21,728 tons | ||| 2010/H1: | 22,282 tons | ||| 2011/H1: | 14,446 tons |
| |  2009/H2: | 28,417 tons | 2010/H2: | 7,976 tons | | 2011/H2: | ? |
| Total: | 50,145 tons | 30,258 tons | ? |
First the good news: China appears to be increasing rare earth export quotas for the first half of 2011 – compared to the second half of 2010 – by over 80%. The bad news: The new quotas represent a 35% drop compared to the same period in 2010, and a 33% drop compared to the first half of 2009.
In other words, the short term may be a small improvement over the previous six months, but nevertheless a change that is not inconsistent with recent declines in the output of rare earth elements from China.
Where China ultimately is going with these REE quotas in 2011 isn’t clear, nor does recent history provide any clear cut guide. For example, quotas in 2009/H2 actually increased by 31% over 2009/H1 (28,417 metric tons versus 21,728 tons, for a year total of 50,145 tons).
The influential Bloomberg New Service reported on the quota this morning, headlining (and inaccurately reporting the numbers – Bloomberg editors don’t read their own archive) the story as an 11% cut.
On the other hand, one of the writers at the Rare Metal Blog took the “glass half full” approach with the story, “China INCREASES export quota by 82%” (emphasis in the original).
Traders on some stock exchanges thought they could read China’s mind and early in the day share in U.S. mining company Molycorp shot up by about 12% compared to the previous day’s closing price.
But, according to a New York Times story posted this afternoon (with accurate numbers), China apparently wants to head off some of the gloom:
“In what seemed to be an effort to reassure traders and users of rare earths, the commerce ministry said in a follow-up statement late Tuesday on its Web site that it had not decided what the total export quotas would be for all of 2011 … The ministry said on Tuesday night that companies should not make guesses about the total export quotas for next year based on the initial reductions issued earlier in the day.
“We will be considering the production of rare earths in China, domestic demand and sustainable development needs to determine” the full quotas for the entire year, the ministry Web site quoted its foreign trade department director as saying, without naming the director.”
Apparently the reassurance worked: Molycorp’s closing stock price was a decline of 6%
Although some speculate about economic and business decisions are behind these moves, Chinese officials have recently been saying that environmental concerns are a factor in making quota decisions. Again, from the NYT:
“Until a few months ago, Chinese officials said that their rare earth policies were aimed at forcing foreign industries to move high-tech factories to China so as to have access to Chinese rare earths. But as trade frictions have increased, they have given greater emphasis to environmental concerns.
A Chinese official said on Tuesday that pollution worries about rare earth mining were sincere.
‘The government is paying more attention to environmental protection, and is retiring older facilities and older technologies,’ said the official, who insisted on anonymity because of the political implications of rare earth policies, and declined to discuss specifics of the quotas.’