Rare-earth exports down 27% in June, may affect US manufacturing

Source:Global Times Published: 2019/7/23 20:04:58

A worker unloads rare earths along the Yangtze River's banks in Southwest China's Chongqing Municipality on May 9. Photo: IC

China exported 3,966 tons of rare earths in June, down 26.8 percent year-on-year, according to data released by General Administration of Customs (GAC) on Tuesday. Analysts said the reduced exports will put US under pressure and may affect a wide range of US manufacturing industry.

The estimated value of rare-earth compounds and metals imported by the US in 2018 was $160 million, with 80 percent of the total from China, according to a report by the United States Geological Survey (USGS) in February.

"The heavy dependency on foreign supply chains results in vulnerabilities of relevant American industries," Chen Zhanheng, an analyst at Association of China Rare Earth Industry, told the Global Times on Tuesday. 

Total exports of rare earths and related products in June stood at 7,762 tons, a decrease of 14.9 percent year-on-year. Exports of aluminum oxide, which is widely used in the aeronautics and astronautics sector, as well as in semiconductors and automobiles, dropped 96.8 percent on a yearly basis to 3,757 tons.  

"On the one hand, China has increasing domestic demand as industries relying on rare earths such as semiconductors, aerospace and new-energy vehicles saw fast development in recent years. On the other hand, the world economy is under rising pressure as a negative result of trade protectionism of the US," said Chen.

"The US is under pressure from a lack of rare-earth supplies after it started the trade war with China. Now the US is hoisted with its own petard as China indicated that it will keep its options open for using rare earths as a weapon," said Chen.

A wide range of US manufacturing sectors, from semiconductors and electric vehicles to planes and missiles, rely on imported rare earths from China, said the USGS.

"The US fears that China will limit rare-earth exports, which will result in a huge loss for manufacturing industries in the US as its supply chain may be disrupted," Chen said.

The US is concerned about rare-earth supplies. US President Donald Trump has determined to make up for the shortfall in the production of rare-earth permanent magnets, pursuant to the Defense Production Act of 1950s, a US law that was once used to protect its steelmaking capacity, according to a memorandum issued by the White House on Monday. 

The Pentagon on July 15 sought a quick response about rare-earth output in the US from domestics miners and refiners before July 31, Reuters reported. 


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