The PRC will increase the demand for rare earth metals
Representatives of the holding Shenyin Wanguo Securities Research recently published a report on rare earth elements. Under assumptions of experts the demand for these metals from China increase dramatically. By 2020, consumption will be about 150 thousand tons. The main factors is the development of wind energy. The impact on growth and will have a new transport industries. Alloys of rare earth metals used in the manufacture of permanent magnets. Also, rare earth elements used in the production of computer, aerospace engineering. Indispensable REE for the electricity sector and many other industries.
Despite the ever-present demand, in 2012 the price of rare earth metals went down. Testing considerable surprise, investors are thus believed that the low prices is a temporary phenomenon. decrease in demand is observed in the sector of industrial metals. And the corresponding decline in value that is automatically affected the rare earth business. After all, as well as other materials, rare earth elements are influenced by the world economy. Besides, other reasons exist. Another negative factor influencing the market — the Greek crisis. Over the past few weeks, the Shanghai Stock Exchange has lost about 30% of its value.
China continues to control the global market for rare earth elements affecting the cost and demand. supply control is carried out at the expense of influence on their own producers. Control levers are production licenses, production quotas, tax resources. Exports China acts through tariffs and quotas. However, it intervened World Trade Organization. China was forced to eliminate specific tariffs and quotas. This deprived the Beijing possibility of effective price control. At the moment, China is planning to get a benefit from pent-up demand. In addition, China produces most of the rare earth elements having almost monopoly. In Russia, there are considerable reserves of rare earth elements, but re producing too extended. So China continues to maintain control. But the demand for rare earth products increases. And Russia can use the available benefit.
According to statistics, in 2014 Russia produced only 2,400 tons of rare earth metals. From the global total is only 2.1%. The volume of the Russian Federation's own consumption on the order of 1,500 tons. That points to a fairly low level of Russian exports of REE. At the time, the Soviet Union occupied the 3rd place in the world rankings miners of rare earths. Today, the stock of raw materials in Russia is about 18% of global production capacity. China also owns 42% of the reserves, the production also shows 95%. And the development of the industry continues.