Metals News
Rare Earth Trading always needs to grasp the pricing Power
Jan 7,2020
The content below was translated by Tencent automatically for reference.

SMM: as a key commodity trading platform in Ganzhou City, Jiangxi Province, the Ganzhou rare Metals Exchange officially opened in Ganzhou City on December 31, 2019. This is a rare earth, tungsten and other rare metals and their extension products trading place, will attract more rare metal industry related elements to gather in Jiangxi.

Zeng Ming, mayor of Ganzhou City, stressed that the opening and operation of the Ganzhou rare Gold Exchange will effectively promote the circulation of resources, optimize the allocation of resources, enhance the value of resources, and promote the full competition of rare metals such as rare earths and tungsten in the capital market. It is of great significance to enhance the market pricing power and discourse power of rare metals and products such as rare earths and tungsten in Ganzhou, and to expand the international influence of the rare earth and tungsten industries in Ganzhou.

In fact, the exchange is the second rare earth exchange in China, after the Baotou rare Earth products Exchange opened in Baotou, Inner Mongolia Autonomous region, in 2014. In recent years, Baotou has launched the Xinhua Baotou rare Earth Price Index, guiding the rare earth price system and turning the rare earth exchange into the world's most influential and credible third-party trading platform for rare earth products, making the renminbi the only clearing currency for rare earth transactions in the world.

For a long time, China has been supplying more than 90% of the world's rare earth demand with 23% of the world's rare earth reserves, and its rare earth production, processing and trade have a decisive impact on the world market. However, due to the lack of international pricing power and low industry concentration, China's rare earth industry has not achieved a status and profit consistent with its importance.

At present, the four major non-ferrous metals with global reserves advantages in China are heavy rare earths, tungsten, indium and antimony. Therefore, it is very important to hold the pricing power of these products in our hands. In this context, Ganzhou rare Metals Exchange is highly expected.

Some analysts believe that the successive establishment of Ganzhou rare Metal Exchange and Baotou rare Earth products Exchange will further enhance the market pricing power and discourse power of China's rare metal industry. China should have the market pricing power and discourse power of rare metals. After all, China is one of the largest rare earth countries in the world, and the production and reserves of other rare metals are in the leading ranks in the world.

The establishment of rare earth exchange is obviously one of the important layouts of rare earth discourse and pricing power in our country. Through the reform of the rare earth trading platform, its price is expected to improve the current situation of non-standard and non-uniform quotation, and is expected to form an open and transparent market price in the market competition. A more far-reaching impact is that as the rare earth market price system will continue to regulate, liquidity will be enhanced, conducive to rare earth production enterprises and downstream smelting separation enterprises.

There will be an uphill battle to win the pricing power of rare earths, because Europe, the United States and Japan have a great momentum of "never giving up until they reach their goals" in their demands for China's rare earths and other strategic resources. For example, a foreign company continues to increase rare earth reserves, and then wait for price changes. This is a strategy of foreign capital. Some countries are trying to hold down the price of rare earths in China by temporarily using stocks and reducing purchases.

Of course, pricing power is a kind of control ability, is the control of the whole rare earth industry chain, need to have resources, technology, market, all of which are indispensable. In the new round of rare earth game, in addition to "practicing internal skills", China should also "go out" and let the resources of other countries be used by me.

In any case, if you win or lose with a foreign country, you can only use your strength to speak. If this battle is won, we will really have the pricing power and the right to speak in the rare earth industry in the future.

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