MTL Index: Rare Earths. Price increase confirmed.
(Thomson Reuters ONE) -
Are rare earths once again becoming rare ? February saw confirmation of the
trend begun at the end of last year - the price of rare earths is going up. In
January the price index had already increased by 4.3%. In February we saw an
additional rise of 8.3%. This confirmation indicates that the market is indeed
on the way to recovery.
But demand does not seem to be spread evenly. According to the Chinese Ministry
of Commerce, exports of light rare earths fell sharply, with a plunge of 64%
compared to the same period in 2014. So what could be more natural than that the
production of rare earths outside China, consisting principally of light rare
earths such as lanthanum and cerium, should have sharply increased ? In
contrast, industry players literally rushed to snap up medium and heavy rare
earths. Now that quotas no longer exist, exports have increased by 324%.
However, it should be emphasized that in both cases, the value of exports
escalated by 11% for light rare earths, and by 332% for medium and heavy rare
earths. More importantly still, it's not just the market reforms that explain
this rise.
International demand takes over
Peking is of course continuing the reforms begun in 2014. In February, the rare
earth capital, Baotou, launched yet another campaign against illegal mining, as
part of the policy conducted by the central government. But as Jon Hykawy,
President and Director of Stormcrow Capital puts it, the fact that "for the
first time since the first quarter of 2011, the price of rare earths used in
the magnet sector has seen an increase in the last 3 months, it's an indication
that the demand for magnets is showing strong growth outside of China." A
Chinese analyst points in particular to the industrial recovery in the United
States as an important factor. Pressure on certain rare earths may even appear
rapidly, given the limited size of the market. One Chinese expert mentions that
the Chinese production of dysprosium oxide in 2011 did not really reflect
consumption in the Chinese magnet sector.
It is perhaps this risk of shortage that explains why the Chinese State Bureau
of Material Reserve (SBMR) launched a new round of stock building after the
Chinese New Year. For although external demand is currently enabling the market
to recover, China has the firm intention of retaining it's rare earths for its
local producers in the long-term. Prudent, the long-standing player in permanent
magnets, the Japanese company Hitachi, has just formed a joint-venture with the
Chinese magnet producer Beijing Zhong Ke San Huan Hi-Tech.
China, the engine driving the development of renewable energies
Big consumers of strategic metals, the renewable energy sector bounced back last
year. Global investments rose by 16%, after 2 years of contraction. China in
particular has taken top ranking with an investment of $US 90 billion, an
increase of 32% compared to 2013. Today Peking is a leader in the wind power
market in particular, with the installation of 23 GW in 2014. This is 45% of
capacity installed in 2014 according to the Global Wind Energy Council (GWEC).
It should be noted that 1 MW of wind power capacity consumes approximately 600
kilos of permanent magnets. In comparison, investments in Europe have increased
by only 1%. China is definitely the centre of gravity for strategic metals.
3D printing depends on high-tech metals
Whereas this sector could be worth around $US 8.5 billion by 2020, compared with
$US 2.9 billion in 2014, analysts are taking another look at the benefits that
related sectors might derive. This is notably the case for the materials
sector. Estimated to be $US 400 million, this market could grow by 20% per
annum to reach $US 1 billion and high-tech metals will be particularly involved
in this industrial revolution. Firstly, because the sectors which use 3D
printing are sectors which traditionally consume high-tech metals, such as the
medical, aeronautical and automobile sectors. Next, because printing techniques
involving metals are being continually perfected, notably through impression
with rare earth-based liquid materials. MTL Index, market leader for these
metals in Europe, has clearly understood this and through its investors has
created a strategic stock of these metals.
A market which is recovering
Although all rare earths have progressed these last few months, some have taken
off more rapidly. Terbium for instance has progressed by 47% in the last two
months. This increase has been so strong that certain sellers are waiting for
the price to continue to rise before selling their production, thus reinforcing
the increase. It's not surprising therefore that dysprosium has also seen an
increase of more than 20% in 2015. In all, our index for rare earths has
progressed by 8.3% over the month.
MTL Index
21 rue Ernest Cognacq
92300 Levallois-Perret
Paris
Tel 01 56 76 90 04
www.mtlindex.com
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Source: MTL Index via GlobeNewswire
[HUG#1907600]
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Datum: 01.04.2015 - 08:00 Uhr
Sprache: Deutsch
News-ID 382718
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