• Kyodo


China’s rare earth exports are expected to total around 10,000 tons in 2012, the lowest level in 10 years, primarily due to falling demand in Japan, the largest export market, industry sources said Wednesday.

The amount is far below China’s rare earth export quota of 30,996 tons for this year, suggesting Beijing may no longer be able to use rare earth minerals as a “diplomatic card” against Japan in dealing with bilateral issues such as disputes over the Japanese-controlled, China-claimed Senkaku Islands in the East China Sea.

Along with efforts to diversify sources of rare earth imports, Japan has developed alternative materials and advanced recycling technology in a bid to shield itself from China’s restriction of rare earth exports such as one that came in response to the arrest by Japan of the captain of a Chinese trawler that was involved in a run-in with two Japan Coast Guard cutters trying to shoo it away from the Senkaku Islands in September 2010.

Japan accounted for 56 percent of China’s rare earth exports last year. Rare earths are used in the production of hybrid cars, mobile phones and other high-tech products.

China’s rare earth exports are likely to total 12,000 to 13,000 tons this year. But a trading house employee said exports may not reach 10,000 tons amid a slowdown in the world economy.

According to traders, China’s rare earth exports peaked in 2003 at 74,000 tons. Exports have seen a gradual decline due to tighter government regulations, plunging to 18,000 tons in 2011, less than half the 2010 level.

Inner Mongolia Baotou Steel Rare-earth (Group) Hi-tech Co., China’s largest rare earths producer, has halted some of its production in an effort to stabilize prices amid weak market demand, China’s official Xinhua News Agency reported Wednesday.

“Rare-earth demand has been low and prices have been falling since the second half of the year on the back of the economic slowdown,” Xinhua quoted the company as saying.

Baotou Steel’s latest financial statement showed its net profits dived 89.6 percent from a year earlier to 120 million yuan, or about $19.02 million, in the third quarter due to declines in prices and sales.

In the wake of Japan’s effective nationalization of the Senkakus in September, there were growing calls in China that Beijing should restrict rare earth exports to Japan. But China has continued to export rare earths to Japan, according to traders.

China, which holds around 23 percent of the world’s known rare earth deposits, accounted for 90 percent of global output last year, according to the country’s first white paper on rare earths released in June.

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