More Shenanigans With Chinese Rare-Earth Export Statistics

by Gareth Hatch on January 23, 2013 · 16 comments

in News Analysis, Rare Earths

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In the last day or two it has been widely reported that the total quantity of rare earths exported from China in 2012 was 16,265 t, per statistics from “Hong Kong-based China Customs Statistics Information Service Center”, with this figure representing “a drop of 3.5% compared to the year before”, i.e. 2011.

This would mean that the 2011 figure for total rare-earth exports from China was 16,855 t. The problem with that is that last year, the vice-director of the Chinese Ministry of Industry and Information Technology indicated that the figure for 2011 was 18,600 t, and this figure was also widely used and reported by other sources throughout 2012 – even as recently as last month, in the same article that I criticized recently for getting the smuggling numbers wrong.

So, which is it? 16,855 t or 18,600 t? If it is the latter, then the actual drop from 2011 to 2012, assuming that the figure of 16,265 t is accurate (quite an assumption, I’m now thinking), is closer to 12.6%, not 3.5%, as the newer value being implied for 2011 would suggest. A simple error? Deliberate manipulation? Who knows, but it is yet another discrepancy in a long list associated with these statistics.

It is disappointing to see industry and other commentators re-publishing these types of numbers once published by Chinese media sources, without doing the simplest of basic fact and number checking – or remembering the contents of pieces they re-published or quoted from just a month before.

That goes double for such commentators introducing errors of interpretation of their own. Recent examples include the rather curious notion that the US Department of Energy has control over production levels of rare earths in the US (reality check: it doesn’t), or the nonchalant mixing up of mining and export quota numbers in a dodgy attempt at sector analysis (with no-one apparently noticing the difference).

The lesson here, if there is one? Be sure to check and to double-check your sources of rare-earth sector data and information, and be mindful of the issues described above. Common-sense advice for any sector, of course.

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1 Jackie L. Goldsmith January 23, 2013 at 12:12 pm

Where is there a graph, chart , or table to indicate how much rare earths are in demand in the U.S.? seems there should be a demand rt here in the states….. Demand from industry and demand from military….
To me the demand would be HIGH in the military….

2 Don Burton January 23, 2013 at 12:22 pm

Gareth would the numbers below represent the situation for 2012 and projection for H! 2013? I gathered the numbers from Chinese sources derived from what I could find via TMR. Thank you – Don

LREE M/HREE Total
Total Production from China 2012 75,900 17,350 93,250 tonnes
Chinese Export Quotas 2012 27,122 3,874 30,996 tonnes

Production from China H1 2013 37,950 8,950 46,900 tonnes
Chinese Export Quotas H1 2013 13,561 1,938 15,499 tonnes

3 William Tahil January 23, 2013 at 1:28 pm

” A simple error? Deliberate manipulation? Who knows, but it is yet another discrepancy in a long list associated with these statistics.”

As per the Lithium industry always quoting resources as if they were extractable reserves.

And the wildly optimistic figures promulgated for the amount of Lithium required in an EV battery.

4 Volker Zepf January 24, 2013 at 3:38 am

Hello Gareth,

a very interesting and VALID insight! In my PhD thesis about REE (which will be available end of January 2013) the data problem is one of the key points in my thesis. As you say, especially media, but also consultants and even research institutes, do not frequently (re)check the validity of such numbers. I think that another point of error is to take estimated numbers as factual numbers and so on.
Nevertheless, if the export values repeatedly were around 17.000t, and if the export quota is around 30.000t, why do we still propagate this export quota as a problem? Or could it be, that our complete numbers about REE are unreliable?
I think, there is way more solid research necesary.

5 blackjack January 24, 2013 at 5:40 am

REE’s are now becoming one of the most manipulated stocks on the exchanges.

Rubbery figures and political fighting all goes towards who to believe and what to believe. Just have a look at MOLY.

beware folks

6 joaquim sanz January 25, 2013 at 6:40 am

Hellow Gareth,

I’m a teacher of mining engineering in Manresa (Barcelona) in School of MInes, How can explain (easy) to my students the main prices variation of REE oxides, from setember 2010 (chinese fishing conflict) – top prices (july 2011) and fall down until october 2012
Thank you very mutch

7 Gareth Hatch January 25, 2013 at 6:41 pm

@Jackie L. Goldsmith: US demand for rare earths as raw materials was around 11,500 t last year, with most of that going into catalysts, ceramics and metal alloys. There is presently little demand for rare earths in these forms for military applications; such applications rely on the acquisition and use of finished components that contain rare earths, and most of those come from overseas.

@Don Burton: the export quota numbers are right; the production (mining) quota numbers look about right too.

@William Tahil: this stuff is rife in the junior-mining sector, for sure.

@Volker Zepf: would be interested to read your thesis once it is available! Good point on mistaking estimates for hard numbers. and I agree that actual supply has never been a problem. There are a few “quirky” commentators who believe that heavy rare earths have been banned from export from China, but it ain’t so…

@blackjack: I empathize with those whose interests in the rare-earths sector revolve around investments; as a “supply-chain guy” I have the luxury of sitting back to see which juniors make it past the river crossing without getting pulled down by the crocodiles…

@joaquim sanz: I would first point out that the start of the price increases of exported rare earths was July 2010, after the announcement that the Chinese export quotas for 2010 would be around 30,000 t, down from the previous 50,000 t. The news concerning Japan / China really had no effect on the prices. That quota announcement led to the traders /suppliers slapping on an ever-increasing surcharge for the use of each tonne of quota, whether it was a normally cheap light rare earth like La, or something more expensive like Eu. There was never any actual shortage of supply – in my mind it was the traders / suppliers profiteering. By Feb 2011 we started to see price increases for materials for use in China as well, adding additional pain to the export price, with the surcharge going up and up until July / August 2011, when prices started to come down again. For some materials like La oxide, the surcharge has disappeared. For others it is still present.

8 Gennady January 25, 2013 at 7:29 pm

TR-no problem. There is a new search technique, need a sponsor =partner. There are rich regions. No worse than the Chinese. There are cheap labor (India, Africa). There is Russia – teacher of China. g/kaplenkov@mail.ru
H4NB

9 Vincent Bao January 29, 2013 at 9:01 pm

Gareth, thanks for the insight analysis. I have other statistical figures supporting 18600t export in 2011, but this is also surprise to me: why hasn’t he 30kg quota been used up in the year when RE was extremely hot.

10 Joaquim Sanz January 31, 2013 at 5:38 am

Thanks Gareth for your answer.
But I d’ont understand, exactely to explain the students, the reasons of the prices fall down until october 2012.

Now, what is the prices situation and the explanation?

Thanks

11 Jackie L.Goldsmith February 1, 2013 at 8:25 pm

Grath, you are absolutely rt about …..catalytic convertors……Mo as high as 7.13 % and Nb as high as 1.37%…. You would not believe what the values for preciuos metals are…. However,moly and Nobrium is High… Chow…
Excellant field to be in these days….. Espically extracting each element out of the catalytic convertors.

12 Jackie L. Goldsmith February 17, 2013 at 1:01 am

Research of REE and HREE will increase the demand for thses, REE and HREE,,,, mark my words I see it as a research and extractable production view…. I may be wrong but I believe I am rt from the production stand point…. A lot is been evident in the nano particle field and should taken into consideration….. espically the rare earths and precious metals…. Hong Kong ,,, has a platinum/copper/gold alloy nano particle change which will hold… .501 amps of current , just think what the rare earths may posiblly do… the above is used in fuels. Chow

13 nicolas pietrangelo February 17, 2013 at 11:41 am

I will attempt to throw out once again the comments on Lithium vs NIMH batteries, which have gone unanswered(could it be that the brain trust here is holding close to their wishes and pocketbook the future of LITHIUM !!??!! My understanding of technology metals is EXTREMELY VERY LIMITED, but common sense would DICTATE the LITHIUM FUTURE is DIM at best. LG-CHEMICAL/JCI-SAFT/A123 are having ENORMOUS problems getting their act together in this arena as is NISSAN and GM with their touted electric vehicle programs/Ford also with their C-Max hybrid mileage claims of 47mpg!!!! Now enter ALL the HORRENDOUS problems Boeing is having with their 787 Dreamliner Li-ion batteries/Cessana Citation switching back to NICAD as is Airbus jumbo 380 doing the same!!! One would think a VERY BASIC CONCLUSION-NIBY for LITHIUM transportation future. Maybe ALL the metals experts have put their chips on the LITHIUM TABLE. Youz pays your $$$$ youz takes your choice/in my HUMBLE OPINION my chips are on the NIMH TABLE/what Toyota has done and is doing/again Toyota with RECYCLED NIMH batteries to be used for ENERGY MANAGEMENT SYSTEMS/and NIMH turned into Regenerative Fuel Cells. Watch the future folks it’s coming like a freight train-HYDROGEN. The love affair with LITHIUM is OVER it has had it’s chance(BILLIONS upon BILLIONS of $$$$$$$$). HYDROGEN will be the future of energy storage NOT LITHIUM which is dying a slow death before our eyes. Follow the metals train around NIMH/HYDRIDE H2 storage/alkaline based regenerative fuel cells-Nickle based-the Bacon Cell/rare earths. This is NOT an educated opinion/this is a common sense opinion(note I had a wonderful teacher in Stanford R. Ovshinsky-deceased-father of the working NIMH battery-Phase change memory(tellurium)-thin film amorphous silicon solar cells AMONGST OTHER THINGS!!!!!!) Good luck you-all with LITHIUM!!!!!!!

14 Gareth Hatch February 17, 2013 at 12:04 pm

@Vincent Bao: either folks were drawing down on thier existing stocks, buying through illegal channels, or both.

@Joaquim Sanz: in a nut shell it is because the supply chain panicked – they thought that there was going to be a shortage, and so placed multiple orders of material with different companies, which created a false demand. The false demand led to the traders and suppliers adding a premium, or a surcharge, to the actual price. This eventually peaked in July 2011 and then things collapsed. These days, prices continue to fall, though at lower rates of decline. We are still 2-3 times above pre-2010 levels, depending on the REE.

@Jackie L.Goldsmith: research and development will lead to new uses for REEs, but also to new technologies that won’t need REEs. It was ever thus :-)

@nicolas pietrangelo: to my knowledge Jack is not involved in lithium stocks, and I know that I am not :-) I don’t disagree that there are a number of challenges associated with lithium-based battery technologies (not least of which is unit cost), and that La-based batteries still have a future, especially with respect to energy storage associated with intermittent power generation, for solar and wind. Clearly though, there is still a healthy demand for Li-based battery technologies, for certain applications.

15 nicolas pietrangelo February 17, 2013 at 4:39 pm

Garth thank you/any comments on the momentum created by Prime Earth Energy(80% Toyota and 20% Panasonic) in Japan and BASF (acquiring Ovonic Battery) and R.Bosch(acquiring Cobasys) around the NIMH battery. Also in the slide presentation of Great Western Minerals slide 4 IMCOA April 2012 the growth of NIMH batteries rare earth demand from 21,000 tonnes in 2011 to 30,000 tonnes in 2016 a 43% growth. I agree there will always be LITHIUM for consumer electronics, but when it comes to propulsion in cars and electronics in planes it’s days are numbered(cost of containment vessel and weight of same-thermal management-electrical management-FIRE suppression-recycling risks-insurance against catastrophic events-as soon as insurance comes in the lawyers are not far behind-etc) cost cost cost. It’s weight to power ratio will be weighted down drasticially by COST.

16 Mike Ruan July 12, 2013 at 4:04 am

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