According to the Global Times, since China-Myanmar border gates reopened in late November, Myanmar has resumed exports of rare earths, and analysts say that the price of rare earths in China is likely to lower. However, price rises are possible in the long term because of China’s focus on carbon emission reductions.
Customs clearance for Myanmar’s rare-earth materials, which had been held up at border ports for months, started at the end of November, according to a manager of a state-owned rare-earth firm located in Ganzhou, East China’s Jiangxi Province, who is surnamed, Yang.
Coronavirus restrictions forced the closure of two China-Myanmar border crossings in late November, according to thehindu.com.
Around 11 kilometers away from Muse in northern Myanmar is the Kyin San Kyawt border gate, while the Chinshwehaw border gate is farther north.
Due to China’s reliance on Myanmar for rare-earth supplies, analysts believe the rapid restart of rare-earth commerce may indicate the willingness of the relevant businesses in both countries to begin conducting business.
According to an independent rare-earth industry researcher, Wu Chenhui, around half of China’s heavy rare earths, such as dysprosium and terbium, originate from Myanmar.
“As in Ganzhou, China, Myanmar’s rare-earth mines are comparable to China’s. After years of intensive growth, China has mastered several technologies and is now trying to shift its rare-earth industries from mass dumping to refined processing “Wu said.
For the time being, experts believe that the return of the rare-earth trade in China will lead to reduced prices in China, at least for the next several months. In Wu’s estimation, the reduction maybe 10 to 20 percent.
Praseodymium-neodymium alloy prices rose by 20% in November, while neodymium oxide prices rose by 16%, according to data from China’s bulk commodities information web 100ppi.com.
After a few months, economists predicted that prices would rise again because the fundamental upward trend had not yet been broken.
China’s upstream supply is increasing at an unprecedented rate, which may lead to short-term price declines, but the long-term trend is upward because of workforce shortages in the sector.
“Exports are expected to remain essentially flat. Although Chinese exporters may not be able to keep up with demand if overseas customers acquire huge quantities of rare earths, “one insider was quoted as saying.
Wu cited China’s growing demand for rare-earth ores and products as one of the main factors for the rising pricing. Products such as batteries and electric motors benefit from utilizing rare earths.
After the government increased rules to conserve rare-earth resources and ban low-price dumping of rare earths, the whole sector is aware of the value restoration of rare earths, said the narrator.
There have been no substantial changes in the supply structure of rare-earth minerals globally due to Myanmar’s return to exports to China.
Beijing is now seeking new methods to pressure the United States, as indicated by President Biden’s decision to retain some of the tariffs imposed by the Trump Administration in place. In the last several years, we’ve been warning about the possibility of China shutting off the supply of 17 rare earth metals vital to creating high-tech devices.
We revealed earlier this year that Beijing was secretly enforcing an export restriction on rare earths. Now, it seems that the CCP is seeking to strengthen state control over the production of rare earths to regulate better who obtains the metals.
The CCP is consolidating the assets of several state-owned companies to establish the China Rare Earth Group, which will mine rare earth metals. Jiangxi Province, where the new mining behemoth will be situated, has a wealth of resources required to manufacture chips and other components used in high-tech goods ranging from computers to military systems.
Up to 90% of the world’s supply of rare earth metals is controlled by China. Rare earth mining is very limited outside of China. The graph below provides some insight into where the remaining resources are found.
Some claim that China is losing its grip on the world market for rare earths, but this is just a fraction of the reality.
“Strategic ends” have always been a concern for Washington, and WSJ notes that this current drive to centralize rare earth supply comes at a time of “increasing sensitivities” toward the West. In addition to environmental concerns, Beijing has underlined that the development of new mines might contaminate whole communities.
Australia, a longtime US ally, has lately been a target of Beijing’s fury; therefore, the US has made some efforts to promote increased production of rare earths there. After signing a deal with Lynas Rare Earths in February, the US Defense Department described the business as “the biggest rare earth element mining and processing corporation outside of China.” It was agreed that Lynas would build a light rare-earth processing plant in Texas as part of this agreement. Rare-earth materials have also been named one of four sectors where President Biden needed more comprehensive policy choices to address supply chain risks.
In 2019, a rare earth refinery visit by President Xi was interpreted as proof that rare earth miners had finally “arrived,” to use ambiguous economic terminology.
As far as Beijing’s plans go, they’ve kept quiet. As stated by the state-run Global Times earlier this year, ‘China has no intention of using rare earths as a countermeasure against any nation.” However, when “foreign enterprises damage China’s interests,” this option remains open.