Disappears China monopoly in rare earths

China will lose its monopoly on rare earths largely by the end of this decade. The entry of new operators will lead to, that the existing due to the Chinese monopoly price premium on the world market price for Rare earth virtually disappears. For light rare earths in the world market price will drop significantly already in the next three years. In heavy rare earth can China maintain its monopoly position, however, in some cases up to the end of the decade. This emerges from a study, the Centre for European Economic Research (ZEW) created on the basis of the newly developed metal market model METRO.

China currently produces around 90 Percent of the mined annually 110.000 Tons of rare earths. Due to export restrictions, the Middle Kingdom can significantly affect the world prices, because evasion is very difficult to other raw materials for the company. In addition, the global demand for rare earths, because this particular in key- and future technologies are used.

With the U.S., Australia and Canada are pushing in the coming years, however, new suppliers, especially for the more frequently occurring Light rare earths to market. The ZEW study is using the metal market model METRO to the conclusion, that up 2020 the promotion of rare earths outside China up to 140.000 Tons could rise in. This would correspond to half the projected time for this worldwide delivery. Since the development of a mine for rare earths between ten and 15 Takes years, is the softening of China's monopoly more long-term to see. However, the mines have, which are currently being developed, relatively small amounts of heavy rare earths. As a result, will remain in this area for more China's supremacy as in Light rare earths.

More hopes on the road to greater independence from China's commodity exports are also associated with the recycling of rare earths. An additional supply of recovered rare earth could help, Curb China's market power. However, the prerequisite is, reach that appropriate technologies to market, as long as a few new mines have started their work, because long-term recycling also needs to lower the prices to compete with the mining industry through expanded production capacity.

An element of uncertainty regarding the results of the ZEW study is difficult to predict technological progress, influences the demand for rare earths. So have some buyers, due to the significant price increase in the past years, already started to search for alternative raw materials. If such alternatives found, demand is falling and the price of rare earths decreases.

Basis for the ZEW study is the research in the field of environmental- and Resource Economics, ZEW newly developed metal market model METRO. It maps the physical life cycle of the metals of the deposits in the soil to disposal or recycling. METRO is the first metal market model, taken into account the capacity expansion.

The complete publication in English, see:


For further information please contact:
Frank Pothen, Phone 0621/1235-368, E-Mail pothen@zew.de

Those: idw


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