China Rare Earth Says Japan Exports Halted on Lack of Government Permits
Sept. 28 (Bloomberg) -- China Rare Earth Holdings Ltd., which exports 30 percent of its products to Japan, said shipments to the nation were halted from last week after a local branch of the Chinese trade ministry stopped issuing licenses.
“We couldn’t get export licenses to Japan,” John Jiang, a sales manager in charge of exports at China Rare Earth, said by phone from Yixing, Jiangsu province. “They cited system failure.”
Ties between China and Japan soured this month over the detention of a Chinese fishing boat captain whose ship collided with two Japanese Coast Guard vessels in disputed waters. Japanese Economy Minister Banri Kaieda today said China’s “de facto” export ban on rare earths, metals used to make parts of hybrid cars, missiles and televisions, will hurt its economy. China Rare Earth rose 9.2 percent to a record HK$3.44 at the 4:00 p.m. close in Hong Kong. The stock has gained 39 percent in the past three trading days.
The share price gain “maybe due to the fact that rare earth is a very hot investment these days,” Jiang said in the interview. “The market may believe the lack of license to export to Japan won’t hurt our overall business.”
Exports to Europe and U.S. are unaffected, Jiang said. The company lists General Electric Co., Japan’s Nippon Electric Glass Co. and Krosaki Harima Corp. as customers on its website.
Japan accounts for about 6 percent of the company’s sales in 2009, the second-biggest contributor, according to data compiled by Bloomberg. The company gets about 86 percent of its revenue from China.
Rare earths are 17 chemically similar elements, including neodymium and dysprosium. The oxides are used in the production of equipment for General Dynamics Corp.’s M1A2 Abrams tank and Aegis SPY-1 radar made by Lockheed Martin Corp.
China, which controls more than 90 percent of the global rare earth market, cut export quotas this year, forcing prices higher.
China’s Ministry of Commerce spokesman Chen Rongkai said today that China didn’t impose a ban on exports of the products to Japan, repeating a statement he made last week.
To contact the editor responsible for this story: Andrew Hobbs in Sydney at email@example.com.