SHANGHAI, May 15 (SMM) – China’s higher tariffs on US goods are likely to lower imports of rare earth ores, as profit margins across light rare earth producers have already been thin.
US rare earth ores that enter China will be subject to 25% customs duties from June 1, as a result of Beijing’s countermeasures against US tariff hikes on Friday.
About 5,440.9 mt of rare earth ores that originated from the US was imported into China in the first three months of 2019, accounting for 96.5% of the total, showed data from China Customs.
Light rare earth producers are the major consumer of rare earth ores imports. A supply glut has sent prices of light rare earths, such as praseodymium-neodymium oxide, near production costs.
The sharply higher tariffs are set to drive producers to cut or suspend ore imports from the US to avoid much higher costs.
China, as a leading rare earth producer, has limited reliance on imports.
The country in 2018 imported 18.5 mt of rare-earth permanent magnets from the US, which will face tariff of 25%. This took up only 0.7% of the total. US imports in the first quarter came in at 2.7 mt.
About 3.7 mt of US cerium oxide entered China in 2018, and the number for January-March was 0.07 mt. China will slap 20% duties on US cerium oxide.