China Releases Second Round of 2013 REE Export Quotas

Source: Gareth Hatch, Technology Metals Research (7/8/13)

"Last week, the Chinese Ministry of Commerce (MOFCOM) announced the second round of allocations of rare-earth export quotas for 2013."

Last week, the Chinese Ministry of Commerce (MOFCOM) announced the second round of allocations of rare-earth export quotas for 2013, to companies operating in China. This follows the initial announcement outlining the first allocation for 2013 in December 2012.

A total of 15,500 t of export quotas was allocated in this second round, comprising 13,821 t of light rare-earth (LRE) products and 1,679 t of medium / heavy rare-earth (M / HRE) products, bringing the total for 2013 to 30,999 t. This is almost identical to the 2012 total of 30,996 t.

Let's now take a look at the allocation numbers associated with this week's announcement, before reviewing them in the context of the full year's allocations, and those of recent years. The companies below, highlighted in green are Chinese / non-Chinese joint-venture (JV) companies - the rest are Chinese-owned. The list is sorted from highest-to-lowest total allocation:

Second set of allocations of rare-earth export quotas, issued to
individual companies for 2013. Source: Chinese Ministry of Commerce
Exporting Company	Allocation (tonnes)
Exporting Company	LRE	M/HRE	Total
Baotou Rhodia Rare Earth Co.	1,020	65	1,085
Gansu Rare Earth New Materials Co.	881	72	953
China Nonferrous Import-Export Co. Jiangsu Branch	758	137	895
Grirem Advanced Materials Co.	735	141	876
China Minmetals Corporation*	670	140	810
Yiyang Hongyuan Rare Earth Co.	712	21	733
Yixing Xinwei Leeshing Rare Earth Co.	611	114	725
Ganzhou Chenguang Rare Earth New Materials Co.	660	57	717
Leshan Shenghe Rare Earth Technology Co.	647	56	703
Zibo Jiahua Advanced Material Resources Co.	683	19	702
Guangdong Rising Nonferrous Metals Group Co.	572	79	651
Jiangyin Jiahua Advanced Material Resources Co.	529	118	647
Liyang Rhodia Rare Earth New Materials Co.	489	141	630
Xuzhou Jinshi Pengyuan Rare Earth Materials Co.	546	54	600
Ganzhou Qiandong Rare Earth Group Co.	455	94	549
Inner Mongolia Baotou Steel Rare Earth Hi-Tech Co.**	509	28	537
Baotou Huamei Rare Earth Hi-Tech Co.**	508	29	537
Sinosteel Corporation	462	44	506
Inner Mongolia Baotou Hefa Rare Earth Co.**	444	27	471
Chalco Rare Earth (Jiangsu) Co.	373	96	469
Jiangxi Rare Earth & Rare Metals Tungsten Group Co.	438	6	444
Shandong Pengyu Industrial Co.	378	40	418
Baotou Tianjiao Seimi Rare Earth Polishing Powder Co.**	201	9	210
Huhhot Rongxin New Metal Smelting Co.	155	14	169
Baotou Santoku Battery Materials Co.	159	10	169
Ganxian Hongjin Rare Earth Co.*	132	31	163
Guangdong Zhujiang Rare Earth Co.	83	37	120
Xi'an Xijun New Materials Co.	11	0	11

Sub-Total: Chinese-Owned	9,974	1,189	11,163
Sub-Total: Chinese / Non-Chinese JVs	3,847	490	4,337
Total	13,821	1,679	15,500

* Part of China Minmetals Group, which was allocated a confirmed total of 973 t.
** Part of Baogang Group, which was allocated a confirmed total of 1,755 t.

Here is a comparison of the quota allocations for the past five years:

Export quotas for the Chinese rare-earth industry (tonnes)
Source: Chinese Ministry of Commerce
Year	Period	Chinese-owned	Chinese / Non-Chinese JV	Sub-Total	TOTAL
2009	H1	15,043	6,685	21,728	50,145
2009	H2	18,257	10,160	28,417	50,145
2010	H1	16,304	5,978	22,282	30,258
2010	H2	6,208	1,768	7,976	30,258
2011	H1	10,762	3,746	14,508	30,246
2011	H2	12,221	3,517	15,738	30,246
2012	H1	16,066	5,160	21,226	30,996
2012	H2	6,340	3,430	9,770	30,996
2013	H1	11,136	4,363	15,499	30,999
2013	H2	11,163	4,337	15,500	30,999

We can see that there has been little change in the total quantity of allocations in the past four years, even if the structure and methods of allocations have evolved. The same companies which were allocated first-round quotas in 2013 also received them in the second round.

Given the projected increases in non-Chinese supply of LREs in 2013 and beyond, it was expected in some quarters that MOFCOM might eliminate export quotas for LREs; while this has not yet happened, it is still a distinct possibility. MOFCOM was apparently at pains to preserve the total export quota numbers in comparison to 2012, perhaps in an attempt to minimize volatility caused by the allocations. Of course, doing so is a case of "too little, too late" given that the rare-earth price increases which peaked in mid-2011, were caused by the rare-earth supply chain mis-interpreting the drop in quotas in 2010 as an actual restriction on supplies from China...

Gareth Hatch
Technology Metals Research

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