In the context of a global economic slowdown, development of the global rare earth industry was frustrated in 2014. Demand for rare earth is shrinking, with end-users seeking to reduce production costs and avoid the risks associated with the dramatic changes in raw material prices. As a result, most consumers have completed a transformation which has seen them switch to using alternative products in place of rare earth. The price of rare earth products has continued to drop, resulting in many rare earth projects proceeding a good deal more slowly, with much of the "heat” around rare earth having dissipated. So when can we expect to see a turnaround in the global rare earth industry?
The Chinese rare earth market in 2014 has seen a continuation of 2013’s depressing trend, with prices on the decline due to the paucity of downstream applications for rare earth and unrestrained expansion in domestic rare earth capacity, alongside the rampant growth of the black market industrial chain. On August 8th, 2014, (August 7th, Geneva time), the World Trade Organization (WTO) announced the findings of its Appellate Body report on the case of the United States, European Union and Japan imposing export management measures against China for its rare earth, tungsten and molybdenum-related products (rare earth case for short). The Appellate Body upheld the adjudication which was reached at the end of 2013, stating that they thought the export tariff and export quotas on China’s products in the case do not conform to the relevant WTO rules and China's commitments when it entered the WTO. So what measures will be taken by the Chinese government after losing the WTO lawsuit? Will the rare earth export tariff and export quotas be abolished? What challenges can the Chinese rare earth export market expect to face?
The rare earth industry in the United States, Australia, Europe and other countries also saw slower development in 2014, saddled with high production costs, while at the same time the price consumers were prepared to pay was very low. In order to secure deals, producers have had to lower their prices. Faced with such fierce market competition, how might producers outside China reduce their production costs and improve competitiveness? Against the backdrop of shrinking global demand, what kind of opportunities and challenges are rare earth projects in the rest of the world likely to face?
It has now been three years since the rare market entered its “bleak period” in the second half of 2011. so what will be the future direction of an industry that has been honored by comparisons with the oil industry in the Middle East? Will the rare earth market stage a significant return in 2015? Asian Metal will be hosting the Seventh International Rare Earth Summit at Chongqing in May 14-15, 2015, and cordially invites people from all walks of life, both at home and abroad, to meet with us there. Let us discuss the issues and together seek a development direction for the rare earth market.
