SHANGHAI, Mar. 15 (SMM) – After US, Japan and Europe filed over China’s rare earth export control, rare earth middlemen in China are building stocks and producers are becoming ever more persistent on quotations.
US, Europe and Japan are major buyers of Chinese rare earths and account for over 80% of China’s rare earth exports. The latest WTO filing will lead to quicker consolidation and regulation of China’s rare earth industry, which may not be what the filing intends to get.
The previous WTO filing towards 9 raw materials did not trigger swift response from China as for the latest rare earth one. In addition, China’s defeat in WTO ruling for the 9 raw materials will add to China’s capability to respond to the rare earth filing. Chinese rare earth policies will also be adjusted accordingly.
One consequence of the latest filing is China will strengthen regulation of its rare earth industry, from mining to circulation. Meanwhile, China will successively publish relevant standards, special invoices and environmental protection taxes for rare earth products, which will lead to higher production costs and consequently higher prices.
Further more, Chinese rare earth industry players say if China loses the latest WTO filing and loosens export control afterwards, increased export will also push up prices as production is being regulated.