China Rare Earth Market Report 2019-2023: China's Rare Earth Exports to the United States Accounted for 78% of U.S. Rare Earth Imports

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May 24, 2019, 17:45 ET

DUBLIN, May 24, 2019 /PRNewswire/ -- The "Research Report on China's Rare Earth Industry, 2019-2023" report has been added to ResearchAndMarkets.com's offering.

Rare earth elements and metals are widely used in the industry. Rare earth elements are essential to aircraft engines, mobile phones and drill bits for oil and natural gas mining. As new energy vehicles are expected to replace traditional fuel vehicles, both military and civilian industries have robust demand for rare earth.

In 2017, China produced more than 80% of rare earth metals and compounds in the world. China's rare earth exports to the United States accounted for 78% of U.S. rare earth imports while the rare earth from Estonia, France, and Japan only accounted for 14% in total. In 2017, the United States imported more than 17,000 tons of rare earth compounds, of which 10,000 tons of lanthanum compounds and 3,600 tons of cerium compounds were from China.

Driven by low mining costs (including low labor costs) and low environmental protection costs, in the 1990s, Chinese enterprises started mining and exporting rare earth on a large scale. Consequently, most other countries stopped mining rare earth. In the past decade, China's rare earth reserves fell sharply. Its proportion in the global rare earth reserves once exceeded 70% while at the end of 2016, the proportion was only 37%.

To regulate rare earth mining, in the second half of 2018, the Chinese government began to shut down illegal mining enterprises and cut rare earth production quota to 45,000 tons, down 36% from 70,000 tons in the first half of the year. To upgrade its rare earth industry, China shifts from exporting crude ores to exporting oxide products, which greatly impacts the global rare earth market.
After China Minmetals Rare Earth (Ganzhou) Co., Ltd. and CHALCO Guangxi Branch stopped producing rare earth ores because they failed to meet environmental protection standards, ionic rare earth ores fell short of demand in southern China.

Subsequently, Chinese mining investors mined ionic rare earth ores in Myanmar and Vietnam and exported the mined crude ores to China for refining. However, in early Nov. 2018, all levels of government in Myanmar prohibited the rare earth mining activities of Chinese enterprises because of the uneven distribution of benefits. In response, China's Yunnan Customs announced that it would ban all mineral imports from Myanmar. If the policy is strictly implemented, the prices of heavy rare earth such as dysprosium and terbium will increase on the global market. But it is uncertain how long the import restriction will last and how it will affect the volume of China's heavy rare earth imports.

China has been the world's largest exporter of rare earth for years

In 2018, China's rare earth oxide imports reached about 41,400 tons, increasing by over 100% YOY. Meanwhile, the domestic production of rare earth oxides shrank as China combated illegal rare earth production. China's rare earth imports are mainly minerals and chemical concentrates from Myanmar and the United States. In 2018, China imported about 26,000 tons of rare earth carbonates from Myanmar, which accounted for about 25% domestic demand. The heavy rare earth from Myanmar accounted for nearly one-third of domestic consumption.

U.S. enterprises ship lanthanum-rich ores to China and then buy oxides and chemical products from China. The United States is the major buyer of China's rare earth, and lanthanum is used to refine oil. Last year, Myanmar became a key supplier of the dysprosium, terbium, and gadolinium to Chinese producers of magnets and alloys. In 2018, the United States announced import tariffs on China's rare earth in its trade frictions with China but later it withdrew this decision. In the long term, China's rare earth imports will continue to grow. In addition to the United States and Myanmar, Australia is also exporting rare-earth to China.

In 2018, the production volume of neodymium-iron-boron permanent magnets in China increased by 5% and the consumption increased by about 6%. The supply and demand in the domestic market were close to balance. The export volume and export value increased by 11% and 14% respectively.

In 2018, China only approved 115,000 tons of rare earth production quota, giving priority to meeting domestic demand. As a result, the global production of primary rare earth oxides grew by 20.80%. The growth was mainly attributable to the United States and Myanmar. On the other hand, since China started combating illegal rare earth mining in Sept. 2018, illegal rare earth production decreased by 50%. The consequent market gap is filled by other countries. The concentrate imports from Myanmar have become an important source of the dysprosium, terbium, and gadolinium for China's magnet and alloy manufacturing industries.

The mining and refining of rare earth in China is monopolized by six major state-owned enterprises (SOEs). Non-SOEs only have access to downstream industries such as the production and application of rare earth materials, namely, permanent magnet materials, catalytic materials, luminescent materials, polishing materials, and hydrogen storage materials. With the rapid development of global high-tech industries, rare earth are being applied to more high-tech fields and the consumption of rare earth new materials is growing rapidly. The new energy vehicle industry, the wind power industry and other consumers of rare earth all have a promising future, which promotes the development of the rare earth industry.

For example, in 2018, the global production of new energy vehicles exceeded 2 million units, among which 1.27 million units were produced in China, up by about 60% YOY. Rare earth hydrogen storage alloys are mainly used in NiMH power batteries. A hybrid electric vehicle needs about 10 kg of hydrogen storage alloy. In general, a hydrogen storage alloy contains 30% mischmetal, which means that a hybrid electric vehicle consumes about 3 kg of rare earth. The drive motor of a hybrid electric vehicle consumes about 1 kg to 3 kg of neodymium-iron-boron magnetic materials; the drive motor of a battery electric vehicle consumes about 5 kg to 10 kg.

According to the plan of the Chinese government, the annual production of new energy vehicles in China will reach 6 million units in 2023. If this goal can be achieved, new energy vehicles will consume 30,000 tons of rare earth or more, which will boost the development of China's rare earth industry.

The Sino-U.S. trade war has little impact on China's rare earth industry. For example, in May 2019, the United States again decided not to impose import tariffs on China's rare earth and other key minerals. It shows that the United States still relies heavily on China's minerals to produce consumer electronics, military equipment, and many other products.

Topics Covered:

Global supply of and demand for rare earth
Global trade of rare earth
Chinese government's policies on rare earth
Rare earth production in China
Demand for rare earth in China
China's rare earth imports and exports
Price trends of rare earth and rare earth materials in China
Major rare earth mining and refining enterprises in China
Major producers of rare earth materials in China
Driving forces and market opportunities for China's rare earth industry from 2019 to 2023
Forecast on the supply of and demand for rare earth in China from 2019 to 2023
Impact of the Sino-U.S. Trade War on China's rare earth industry

Companies Mentioned

Advanced Technology & Materials Co, Ltd.
Aluminum Corporation of China Limited (CHALCO)
Anshan Kingpowers Advanced Materials Co, Ltd.
Baotou New Century Rare Earth Co, Ltd.
Baotou Qitong Rare Earth Co, Ltd.
Baotou Santoku Battery Materials Co, Ltd.
Baotou Tianjiao Seimi Polishing Powder Co, Ltd.
Baotou Xinyuan Rare Earth Hi-tech & New Materials Co, Ltd.
Beijing Jingyuntong Technology Co, Ltd.
Beijing Zhong Ke San Huan Hi-Tech Co, Ltd.
Chengdu Galaxy Magnets Co, Ltd.
China Northern Rare Earth (Group) High-tech Co, Ltd.
China Southern Rare Earth Group Co, Ltd.
Fujian Rare Earth (Group) Co, Ltd.
Gansu Debao New Materials Co, Ltd.
Gansu Jinyang High-tech Materials Co, Ltd.
Gansu Rare Earth New Materials Co, Ltd.
Ganzhou Huajing Rare Earth New Materials Co, Ltd.
Ganzhou Qiandong Rare Earth Group Co, Ltd.
Grinm Advanced Materials Co, Ltd.
Guangdong Rare Earths Industry Group Co, Ltd.
Guangdong Weihua Corporation
Hangzhou Daming Fluorescent Materials Co, Ltd.
Hebei Hwat Automobile Components Co, Ltd.
Hengdian Group DMEGC Magnetics Co, Ltd.
Hongda Xingye Co, Ltd.
Inner Mongolia Weineng Metal Chemical Co, Ltd.
Inner Mongolia Xi'aoke Hydrogen Storage Alloy Co, Ltd.
Innuovo Technology Co, Ltd.
IRICO Display Devices Co, Ltd.
Jiangmen Kanhoo Industry Co, Ltd.
Jiangsu Bree Optronics Co, Ltd.
Jiangxi JXTC Haoyun High-Tech Co, Ltd.
Jilin Jiafu Chemical Industry Co, Ltd.
JL MAG Rare Earth Co, Ltd.
Ningbo Yunsheng Co, Ltd.
Pengqi Technology Development Co, Ltd.
Qingdao Huicheng Environmental Technology Co, Ltd.
Rezel Catalysts Corporation
Shandong Gemsky Environmental Technology Co, Ltd.
Shanghai Huaming Gona Rare Earth New Materials Co, Ltd.
Shanghai Yuelong Non-ferrous Metals Co, Ltd.
Sihui City Double Win Industry Co, Ltd.
Sino-Platinum Metals Co, Ltd.
Sinopec Catalyst Co, Ltd.
Whole Win (Beijing) Materials Sci. & Tech. Co, Ltd.
Xiamen Tungsten Co, Ltd.
Yantai Zhenghai Magnetic Material Co, Ltd.
Zhongshan Tianjiao Rare Earth Materials Co, Ltd.

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