China May Further Reduce Rare Earth Quotas, Goldman Sachs Says
China, the world’s biggest producer of rare earths, may further reduce its export quotas, pushing prices for the minerals higher, Goldman Sachs & Partners Australia Pty said in a report.
“We suspect that export quotas will shrink further,” because of rising demand within China, analysts led by Malcolm Southwood said yesterday in a report. The quota in the first half this year was set at 14,446 metric tons, down from 22,282 tons a year earlier, he said. Recent trends suggest that the second half quota, 7,986 tons last year, will show a further decline, he said.
China has been curbing domestic output growth and exports of rare earths and minor metals to conserve resources and protect the environment, tightening global supplies and prompting users such as Japan to seek alternative sources. The market will remain in “severe” deficit this year and next, moving into balance in 2013, Southwood said.
“We are of the view that rare earth prices have not yet peaked” and may decline from 2013 to 2015, he said.
China accounts for 95 percent of global output of rare earths, 17 chemically similar metals used in hybrid cars and wind turbines.
To contact the reporter on this story: Rebecca Keenan in Melbourne at rkeenan5@bloomberg.net
To contact the editor responsible for this story: Andrew Hobbs at ahobbs4@bloomberg.net
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