Rare earths outside China manufacturers change strategy, the main long-term stable supply

Around for sales of rare earth magnets and abrasives, global rare earth production companies are working to adjust the strategy. In fact, China's rare earth export restrictions, which were a result of price hikes in the past three years has been, in the last about two years, the international prices hovering at a low level. Largest producer of rare earths outside of China began to hope that the demand side of business trends to sign a long-term agreement, these companies promise to the demand side of the stable supply of rare earth, but as a condition of hope to sell at a higher price.

 

Lynas rare earth smelting plant in Malaysia

 

"In the domestic rare earth prices easily volatility, there is a possibility of a crisis again and the demand side of the rare earth and strive to obtain a stable supply system.", In mid-October, visiting Japan, Australia rare earth producer - the company's chief commercial Lynas Rare Earth officer Jean-Claude Steinmetz (Jean Claude Steinmetz) so stressed that. He argued that the supply of rare earth prices and quantities are stable not only conducive to production companies, but also the interests of customers.

 

Steinmetz's visit to Japan aims to access the magnet and catalyst business, it is proposed to sign a long-term agreement. The company focuses on the signing of three months or six months, such as the longer-term, fixed-price and supply agreement. 3-month agreement will increase by 10 percent, six-month agreement to raise prices by about 20%, however, the stable supply at a fixed price in exchange for the agreement period.

 

The company built a smelting plant in Malaysia for the smelting of rare earth mining in Australia. The maximum capacity of the plant to reach the world's largest annual 20,002 tons, which plans to supply 8500 tons of Japanese companies. Now a lot of time in the form of sales to the spot (immediate agreement), but in the future consider building a stable production and sales system.

 

On manufacturers to change marketing strategies, specializing in sales of rare Japanese trading Samwood Kawasaki vice president Feng said: "The possibility of (currently) lower prices rising rapidly, in such a context, it is estimated willing to sign long-term agreements expensive small businesses. "For the demand side, the current spot price of domestic procurement of rare but can drive down costs.

 

RE prices fell rapidly in 2011 after experiencing soaring now been hovering at low levels. Rare-earth magnet motor is used - "neodymium" The current international trading price of one kilogram 85 to $ 90, "Dy" price for one kilogram not more than 450 US dollars. Only 1/8 and 1/5 at prices around. Prior to the "rare earth shock" has subsided. On the one hand, the supply of rare earths from China's abundant, on the other hand, due to earlier Chinese rare earth export restrictions, and other Japanese companies to develop a technique to reduce the use of rare earth.

 

Well, except for China's rare earth mining enterprises will be increased takeover offer it? Japanese trading company specializing in Advanced Material Japan president Shigeo Nakamura noted around rare earth mining: "If China's environmental problems are magnified, Lynas's advantage will emerge."

 

Chinese rare earth production scale enterprises is small, if the authorities strengthen restrictions for mining, rare earth enterprises require the introduction of environmental protection equipment investment, China's rare earth enterprises are likely to be passed on to the cost of this part of the sales price of rare earth. On the other hand, Linus said: "The company has a wastewater treatment equipment, in order to stabilize the price of long-term supply" (Steinmetz, Chief Commercial Officer).

 

American resource company Molycorp also want to sign long-term contracts in the form of sales of rare earths. The company received until 2042 rare earth production license from California. The company said, "As China to reduce the risk of the option, client companies will propose long-term agreements."