Energy News Beat
China has restricted exports of key rare metals like antimony, causing prices to surge; antimony prices have reached record highs of over $25,000 per tonne.
Antimony is vital for military, automotive, and solar applications, with China producing nearly half of the global supply.
Western rare earth producers face challenges due to China’s market dominance, but new supply chains are being developed in the U.S. and Scandinavia.
Last year, China announced that it would impose restrictions on exports of eight gallium and six germanium products starting August 2023 in retaliation for U.S. imposing trade restrictions and tariffs on Chinese-made products. On August 14, Beijing tightened the noose and announced export restrictions on antimony as part of the country’s latest move to restrict critical mineral shipments. And now prices of antimony and gallium are surging despite the export restrictions having yet to go into effect. Antimony prices have rocketed to an all-time high, with spot prices in China and Europe surpassing $25,000 per tonne, more than double prices at the end of 2023.
Source: Financial Times
China is the world’s largest producer of antimony, accounting for 48% of global mined output. The country’s output in 2023 clocked in at 40,000 tonnes, nearly double Tajikistan’s 21,000 tonnes while Turkey was the third largest producer with 6,000 tonnes. Antimony is considered a strategic metal used in military applications such as ammunition, infrared missiles and nuclear weapons as well as lead-acid storage batteries used in cars and brake pads thanks to its heat resistant properties. Antimony is also widely used in the solar sector to improve transparency for the cover glass on solar cells and is also used in the screens of smartphones.
“It’s a sign of the times. The military uses of Sb (antimony) are now the tail that wags the dog. Everyone needs it for armaments so it is better to hang onto it than sell it. This will put a real squeeze on the U.S. and European militaries,” Christopher Ecclestone, a principal and mining strategist at Hallgarten & Company in London, told CNN shortly after Beijing announced the curbs on antimony exports.
Not surprisingly, shares of rare metal [producers are flying: Hunan Gold Corporation, one of the biggest antimony producers, has seen its shares gain 35% in the year-to-date while those of Perpetua Resources have nearly tripled over the past six months.
Rare Earths Deluge
Beijing has been doing everything in its power to maintain its rare earths hegemony with Chinese producers flooding the markets with rare earths and battery metals like lithium. This has inevitably led to price crashes, thus making it untenable for fledgling Western competitors to continue operations. To wit, lithium carbonate prices have crashed to CNY 75,000 ($10,530) per tonne, a far cry from their 2022 peak at ~CNY 590,000 ($82,850) and the lowest in over three years, amid increasing concerns of oversupply. Meanwhile, in Q1 2024, NdPr oxide prices fell 47% Y/Y; dysprosium prices fell 20% while terbium prices were down 52%. NdPr–an acronym for Neodymium-Praseodymium–is used to produce the world’s most powerful and efficient magnets; dysprosium is used to make alloys for neodymium-based magnets while terbium is used in solid-state devices to dope calcium fluoride, calcium tungstate and strontium molybdate.
Last year, China issued three batches of rare earth output quotas, the first time it issued that many quotas in a single year since it started the quota system. The total quota for 2023 clocked in at a record high of 255,000 tons, good for a scorching 21.4% Y/Y increase. Since 2006, Beijing has controlled its supply of rare earths through the quota system.
“China is driven to maintain its market dominance. This is now a race,” Don Swartz, CEO of American Rare Earths (ARR.AX), has told Reuters.
In response, miners from Australia to Canada have been forced to cut production, pull back on investment plans and initiate layoffs. Even larger producers such as Las Vegas, Nevada-based rare earths miner MP Materials (NYSE:MP) and its Australian peer Lynas Rare Earths (OTCPK:LYSCF) (OTCPK:LYSDY) are barely hanging on, and their shares have crashed.
News Supply Chains
Thankfully, western rare earth producers are still fighting back: China Rare Earth Resources and Technology saw its FY 2023 net profit plunge by 45.7% to 417.67 million yuan thanks to pressure from upcoming western supply chains. A similar trend is being observed in the current year, with the company reporting that Q1 2024 revenue dropped by 81.9% to 301.55 million yuan, leading to a net loss of 288.76 million yuan, versus a net profit of 108.97 million yuan in the same period a year earlier.
China Rare Earth Resources has pointed out that “foreign countries are now proactively installing rare-earth supply chains independent from China,” highlighting endeavors in places such as the U.S., Australia, and Southeast Asia.
Some Western countries are rich in rare earths. To wit, Nordic countries, particularly Greenland, Norway, Sweden, and Finland, have large deposits of a variety of rare earth elements including cobalt, nickel, lithium and graphite, and nickel which remain largely unexploited. According to the Nordic Council of Ministers, the Nordic bedrock hosts over 43 million tons of economically viable deposits of rare earth minerals. Finland, Sweden, and Norway are among the top eight countries favorable for critical minerals and battery supply chain development as per Bloomberg New Energy Finance.
By Alex Kimani for Oilprice.com
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The post Rare Metals Prices Surge As China Restricts Exports appeared first on Energy News Beat.
