Earlier this 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:
| Exporting Company | Allocation (tonnes) | ||
| 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:
| Year | Period | Chinese-owned | Chinese / Non-Chinese JV | Sub-Total | TOTAL |
| 2009 | H1 | 15,043 | 6,685 | 21,728 | 50,145 |
| H2 | 18,257 | 10,160 | 28,417 | ||
| 2010 | H1 | 16,304 | 5,978 | 22,282 | 30,258 |
| H2 | 6,208 | 1,768 | 7,976 | ||
| 2011 | H1 | 10,762 | 3,746 | 14,508 | 30,246 |
| H2 | 12,221 | 3,517 | 15,738 | ||
| 2012 | H1 | 16,066 | 5,160 | 21,226 | 30,996 |
| H2 | 6,340 | 3,430 | 9,770 | ||
| 2013 | H1 | 11,136 | 4,363 | 15,499 | 30,999 |
| H2 | 11,163 | 4,337 | 15,500 |
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…
Hi Gareth,
Thanks for the info as as always. I learned that last year the quotas in 2012 was only used 48.75% and 2011 was used 61.6%. I wonder what is the significance of the quotas. Sometimes, I almost wonder if the quotas actually have been encouraging people to buy more rare earth product…
I wonder how other people think about this.
Best regards,
Christina
Looked Tmr better when there was conversation. Also liked the words of jack Lifton and Gareth. iChat more helpful than the measurements. Are u both too busy with innovations and consulting $$
Namaste
A
Dear Sir,
Thanks for the information with chart of the export quota from 2009 to 2013.
Hi Gareth,
Thanks for the MOFCOM update. Allocations set exports from China. How do the regs deal with companies like Molycorp’s Zipo and Jaingyin that import REOs for separation? Do the imports add to the allowed exports or is Molycorp reducing permitted Chinese production?
— Lee
@Christina Chen: these days the quotas are as much a way of exerting additional control on the individual producers as anything else. For me a key number to watch is the ratio of LRE to M/HRE quota, since they separated the two. The first three allocations (H1 & H2 2012 and H1 2013) are similar (14.2-14.4%) but for this latest announcement, it is closer to 12.1% – i.e. there was a reduction on available M/HREs. We’ll have to wait to see if this becomes a trend.
@Andriette Casantini: thanks for the feedback – we’re working on increasing the frequency of narrative / commentary pieces – watch this space :-)
@E. Lee Huston: to my knowledge the source of feedstocks has no bearing on the quotas. I wouldn’t look at it as Molycorp “reducing permitted Chinese production” – their two facilities have been producing for years and we have to remember that the majority of production in China is destined for China-based end users.
Hi Gareth,
Thank You. Valuable information.
As I know though there export quota,rare earth smuggling is more serious,they smuggled through Hong Kong ?Taiwan then overseas.The result about China WTO case on rare earths this year will come out, there may be some impact on the market.
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