World Rare Earths Demand Set to Reach New Milestone
yesresources.com
Trends in demand
Roskill says that growth in autocatalysts has been strong in response to legislation on lower emission levels, with demand for rare earths in this sector estimated at 4,000 tonnes REO in 2000. Between 1997 and 2000 the demand for rare earth magnets grew at 21% per year in spite of the uncertainties created by the financial crisis in Asia. The report says that total demand for rare earths in polishing powders could increase from 11,500 tonnes REO in 2000 to 16-17,000 tonnes REO by 2004, assuming that the present downturn in consumer demand for electronics and computers is not a longer-term trend.
Phosphors (including pigments) is the largest sector of the rare earths market by value, with gross sales estimated at $300 million in 2000, out of an estimated total rare earths market turnover of $830,000. Roskill anticipates steady growth for this sector in the near future in line with continued demand for phosphors in TVs, computer screens and energy-efficient tricolour lamps.
China increases market dominance
Over the past 3-4 years China has increased its dominance of the world market, supplying an estimated 85-95% of world demand in 2000. Roskill estimates that China mined ores with a contained rare earths content of 75,500 tonnes REO (compared with a global production equivalent to 85,900 tonnes REO), exported 47,000 tonnes REO of rare earth concentrates, chemicals and metals and satisfied domestic demand of 19,200 tonnes REO.
In March/April 2000 China took the following measures to correct an oversupply of processes of rare earths, which was pushing down prices to uneconomic levels: the government restricted exports; minimum prices were set for a range of intermediate rare earth products by an alliance of the major producers; and the government withdrew support for uneconomic enterprises. Coupled with a reduction in the availability of ion adsorption clay ores from southern China, this led to a reduction in the availability of rare earths towards the close of 2000, which had the desired result of increasing prices. However, Roskill says that the downturn in demand for telecommunication products and computers in the first half of 2001 has meant a return to oversupply and reduced prices.
China sacrifices export profitability
The report says that in 1999 China exported 50,000 REO contained, in a wide range of products, with an aggregate value of $460 million, representing increases over 1998 exports, in terms of volume and value, of 10% and 6% respectively. The export of separated rare earths increased by 40% to 20,000 tonnes with a total value of $250 million, an increase of 50%. However, Roskill says that between 1998 and 1999 the average value of rare earths exported fell from $9.50 per kg REO to $9.20 per kg REO, even though there was a significant increase in the normally higher-value separated rare earths. In other words, profitability had been sacrificed for an increase in the gross value of exports.
Stockpiles of rare earth minerals have reduced in recent years, which could well act as an incentive to new mining projects and expansions in China and elsewhere. However, although there is an apparent lack of operational mining and beneficiation facilities to meet demand, there is significant overcapacity in secondary processing capacity. |
