Press Release

How Will China's Short-lived Rare Earth Embargo Impact Global Markets?

November 16th, 2010

Global Information, Inc. would like to present a new market research report, "Rare Earths Elements In High-Tech Industries: Market Analysis And Forecasts Amid China's Trade Embargo" by Information Network.

Just as unofficially as it had been announced, the rare earth minerals embargo on exports to the U.S., Europe and Japan would be lifted through an abrupt decision by the Chinese government on October 28. According to the New York Times, "The embargo, which has raised trade tensions, ended as it had begun  with no official acknowledgment from Beijing, or any explanation from customs agents at Chinas ports."

Only ten days earlier, on October 18th, China had blocked shipments of crucial rare earth minerals to Europe and the United States. As expected this unannounced embargo immediately caused tensions to arise between the respective trading nations. The story goes back a little further, to late September, when dock workers announced to Japanese mineral traders that exports of the vital commodity would be coming to a halt, the Times reported. According to officials, since the embargo ended shipments to Japan, however, still face additional scrutiny and some delays.

Embargo Repercussions

Despite that shipments from China have resumed, foreign buyers still face the possibility of shortages. Prior to this, manufacturers of a wide range of high-tech products were already fearful of the long-term affects as they were already feeling the impact of price hikes in rare earth element-based processing materials because of the Chinese embargo. The rapid prices spikes are not exclusive aftereffects of the embargo itself as high tech industries will continue to face high prices until non-Chinese rare earth mines are established and functioning. The global marketplace as a whole is experiencing the effects of shortages in rare earth supplies. Chinas own industrial needs fro rare earths have increased substantially. In fact, Beijing has repeatedly reduced its export quotas over the last half-decade. According to the Times, "So even when China is shipping its full quotas, the outbound supply is now well below world demand."

In several years from now, more non-Chinese rare earth mines should be up and running, hence increasing product availability and stabilizing prices while reducing global dependence on Chinese mines. According to the Information Network, "this is a wake-up call for non-Chinese mining operations, governments, and corporations to take proactive steps to get out of the stranglehold China has on the rest of the world."

Global Information Inc.(GII) - specializing in market research provision for the vertical industries, GII offers expert independent recommendations of publications from hundreds of the globe's leading market research firms.

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