Chinese Giant Halts Rare Earth Shipments to Hike Prices

CommanderFrank

CommanderFrank

Cat Can't Scratch It
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China hasn’t been part of the World’s Capitalist Club for very long, but they learn very quickly. China controls the lion’s share of the world’s production of rare-earth and is starting to exploit that natural resource. Rare-earth prices rise causing electronics prices to rise. It’s a no brainer: The law of supply and demand at its finest.

In recent years China has deliberately increased rare earth prices. This has affected, for example, disk drive prices, although, very recently, rare earth prices have declined.
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I think prices were falling I read somewhere so they wanted to at least maintain what they were. I also understand that the media has blown the issue way our of proportion and that the rare earth metal issue is not nearly as bad as it's played out to be.

It's been reported that only China can provide these materials. again, not true. If you do some real research, these rare earth materials are not only stock piled but can be supplied from a few different sources. At least from what I read on Wired.com last year.

The Chinese understand better than anyone that volume and cheap prices creates wealth. If they try and get too greedy they run the risk of losing money, not making it. They know this. Also, SSD drives use absolutely no rare early materials. They could hasten the adoption even faster and again, cut their own throats. They are walking a tight-rope to say the least.

Blame the media .... again.
 
It's a good thing that Japan recently discovered a bunch of rare earths and there was another recent discovery of rare earths in California too. China must be getting worried about the upcoming competition.
 
Keep your eyes on Nebraska. Early studies show the high probability of massive rare-earth deposits right here in the U.S.
 
There are even reports that Russia has a large stockpile / mines, etc, plans to provide these materials in the near future / coming years.

I think what it comes down to is China made the "initial" investment in providing these materials to the rest of the world to the point where other nations got content, lazy and felt they did not need to make the investment into said infrastructure. At some point, questions were raised, China got a big head and now, here we are. Sure, I do believe they have the upper hand at the moment. But lets be clear on a few things. Gold is extremely rare compared to these rare earth materials and gold can be found the world over. To put this into context and I am pulling this example from a wired.com article I read last year, these rare earth materials are 1000x more common the world over vs gold. So, really not much to worry about.

I think there might be a handful of years that there will be a window where China can extort additional monies from the market until other sources can be brought online.
 
But lets be clear on a few things. Gold is extremely rare compared to these rare earth materials and gold can be found the world over. To put this into context and I am pulling this example from a wired.com article I read last year, these rare earth materials are 1000x more common the world over vs gold. So, really not much to worry about.
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You're right that rare earth metals aren't that rare compared to gold. What makes "rare earth" metals "rare" though is that they tend to be scattered all around and not really in many huge deposits. This makes it questionable to start a mine in many areas since the return per mine isn't very large. Our inability to cost-effectively mine small deposits makes these minerals rare.
 
There is also a reason why China ended up being the major exporter of these materials in the first place over the last 50 years. It because no one else wanted to make the investment. Now, many countries are and until that happens they will continue to pull stunts like this to extort money out of the supply chain.
 
Just an FYI but what China is doing is NOT capitalism... The end result however will yield the benefits of capitalism as many more players will join the market...
 
Eisenblut said:
I'm sure environmentalists will prevent that from being exploited.
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With the current jobless rate, I would not want to try and guaranty the safety of anyone that got in the way of job creation without a really, really good reason. A regular Joe about to lose his, and his family's, home can be as dangerous to individuals in obstructionist groups, as a junky needing a fix is to a guy wearing a Rolex.
 
Yep china is hardly the only source of rare earth metals. They're just the cheapest because of little if any concern for the environment, and a work force that's look at as disposable. They get too greedy and they'll just be shooting themselves in the foot; because others can take their place.
 
Mountain Pass used to supply the majority of the world's rare earth metals. They have been reworking the mine for some time now and IIRC they are supposed to be bringing it back online (for mining not just processing old stock) now since the price of REE is up and they can overcome the environmental mitigation costs.
 
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