China Expected to Manipulate Market Despite Lifting of Ban

Mining Weekly reported that despite lifting its rare earths export quotas, China may still manipulate the global market by giving preferential treatment to domestic producers as it plans to create an economy based on value-added products.

As quoted in the market news:

Benchmark analyst Simon Moores believed that despite China axing the quotas, the global rare earths market dynamics would not fundamentally change and that China’s preferential treatment of domestic producers would continue by other means.

Moores stated:

We expect China to refocus its efforts on restructuring the way it issues export licences to its producers and on simplifying its rare earths tax system.

Without a licence, companies are banned from exporting. Beijing still controls this vital bottleneck of the supply chain, therefore, whether it caps exports at the port or controls the number of export licences issued, the result is the same; restricted supply of rare earths to the rest of the world.

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