Significant Increase in Rare Earth Orders Last Month Amid Chinese Threats

Rare Earth Exports Up 14.1% in November Compared to Previous Month... Prices Also Rise
Usage Declined Due to COVID-19 Impact, Orders Surge Ahead of December Export Control Law Implementation

[Asia Economy Beijing=Special Correspondent Jo Young-shin] Rare earth exports have surged ahead of the enforcement of China's Export Control Law. This is due to increased advance orders for rare earths amid concerns that rare earths would be included in the list of controlled items under the Export Control Law. China's threat appears to have been effective in the market for now.

According to the China Customs Administration (Customs Office) on the 8th, China's rare earth exports in November reached 2,611 tons, a 14.1% increase compared to the previous month.

As demand for rare earths suddenly increased, prices also soared. The Global Times reported that prices of Chinese rare earths surged more than 14% in November compared to the previous month, with especially significant price increases for neodymium, dysprosium, and terbium, which are raw materials for high-performance magnets.

Chinese rare earth mine

Rare earths refer to 17 rare minerals including 15 lanthanide elements from atomic number 57 (Lanthanum) to 71 (Lutetium) on the periodic table, plus scandium and yttrium. They have high thermal conductivity and homeostasis that maintains their properties despite external environmental changes, making them widely used in advanced industries such as semiconductors, displays, and batteries. They are also essential elements for weapon manufacturing. China holds about 60% of the global market share.

As of the end of November, the total volume of China's rare earth exports was 31,280 tons. This represents a 26.7% decrease compared to the previous year, due to reduced production of rare earth-related products amid the impact of the novel coronavirus disease (COVID-19), which lowered demand.

Qian Zahang, Secretary-General of the China Rare Earth Industry Association, explained the decline in rare earth exports this year by saying, "Due to COVID-19, industries worldwide are struggling, leading to a significant decrease in rare earth demand." He added, "In the case of the United States, a major importer of rare earths, orders decreased by 40 to 50% this year, with export value amounting to only $320 million."

The sudden increase in rare earth orders, which had been lacking due to COVID-19, appears to be influenced by China's Export Control Law, which took effect on December 1. If rare earths are included in the list of controlled export items, export and import procedures become more complicated. To counter U.S. regulations such as sanctions on Chinese companies, China passed the Export Control Law bill at the Standing Committee of the National People's Congress (NPC) in October. The export control targets include dual-use goods, technologies, services, and data that can be used for military purposes or enhance military potential, whether for military or civilian use.

This law is effectively China's hidden card and weapon against the United States. If the supply of rare earths is blocked, it could significantly impact U.S. advanced industries.

However, since the Chinese government hopes to improve relations with the Biden administration, it is widely expected that China will be cautious in using the rare earth card.

Meanwhile, on the 3rd, China's Ministry of Commerce designated Chinese cryptographic technology (including semiconductor chips that prevent data leakage) as the first export control item through a public notice.

This content was produced with the assistance of AI translation services.