BEIJING – The prices of Chinese prices of rare countries will climb further, following years of strikes following the monitoring of state media reports that Beijing can assert its domination of the dominance of valuable minerals in its trade war with Washington.
Workers transport the soil containing elements from rare exporting countries to the port of Lianyungang, Jiangsu Province, China, October 31, 2010. REPAIRING / STRINGER
Rare countries, a group of 17 elements that emerge in low concentrations in the country, are used in a wide range of products ranging from lasers and military equipment to magnets found in consumer electronics.
China provided 80% of the rare countries that imported the United States from 2014 to 2017, and Chinese state newspapers reported last month that Beijing could use it as a lever in the current trade dispute between the two.
"Magnetic rare earths are ideal weapons materials … because they are so critical for highly competitive, price-sensitive industries," says Ryan Castillo, executive director of Adamas Intelligence, a consultant who follows the markets of rare countries.
"(Such rare countries) are collectively responsible for more than 90% of the value of market demand every year … (so they) will give the most squeeze juice," Castilux told e-mail from Toronto, adding that the prices were set to constantly increasing.
Prices of methane dyspropyum, used in magnets, high-voltage lamps and nuclear control rods, are currently estimated by Asian Metals at the highest level since June 2015 to 2,025 yuan ($ 292.98) per kilogram.
That's almost 14 percent since May 20, the day Chinese President Xi Jinping visited a rare earth factory, sparking speculation that the materials could be the next front in the Sino-US trade war.
(GRAPHIC: the export prices of rare countries are rising after China rattled the trade war sbs – tmsnrt.rs/2KjEK74)
The price of metal neodymium, which is critical for the production of some magnets used in engines and turbines, has risen to its highest level since last July at $ 63.25 per kilo, which is about 30 percent since May 20, according to Asian Metal .
The price of gadolinium oxide, used in medical imaging devices and fuel cell, has increased by 12.6 percent since May 20 to 192 500 yuan per tonne, the highest in five years.
Asian Metal is a research and price reporting agency that covers the country's few elements.
Chinese prices of rare countries began to move "immediately after China announced an import ban" on rare Myanmar countries, said Helen Lau, an analyst at Argonaut Securities in Hong Kong.
The state securities paper announced on May 13 that the customs in the southwestern province of Yunnan will ban the import of rare earths from neighboring Myanmar, a key supplier of medium-heavy rare raw material since May 15.
"But, a few days later, a large price movement can be seen – so it was mainly due to this possible weapon for rare earths," Lau said.
"If China really gathers rare countries, the United States will not have enough supplies, because it takes some time to build its processing capacity, which is currently zero," she added.
Another analyst, who asked not to be identified due to the sensitivity of the issue, said that the six largest China's rare-line manufacturers hold the most on-the-spot market shares, giving them power over prices.
The six major manufacturers are China Mineremetals Rare Earth Co., Chinalco Rare Earths and Metals Co., Guangdong Rising Nephrorozen, China North Rare Earth Group, China Southern Rare Earth Group and Xiamen Wolfram.
Report by Tom Daily and Shivani Singh; Editing by Joseph Redford