its first rare earths spot trading platformtoday,
led by the countrys largest manufacturer of rare earths
materials: Baotou Steel Rare Earth Hi-Tech.
exchange will operate under the name of Baotou Rare Earth
Product Exchange Co. Ltd, and will involve many of Chinas
principal rare earths producers including Xiamen Tungsten,
Sichuan Jiangtong Rare Earth Co. Ltd and Inner Mongolia Hi-Tech
Holding Co. Ltd.
The aim of the
platform, according to Chinese officials, is to trade rare earthsin a way that
will regulate prices and ensure greater market
important targets in Chinas drive to rein in its
fragmented rare earths industry, which produces over 95% of the
worlds rare earths supply.
commentators have reacted to the news by saying that the
exchange is a way for the Chinese government to direct its
monopoly over global rare earths supply.
Resource Networks Dan McGroarty told IM that he did
not believe the platform would provide greater visibility into
Chinas rare earths industry.
textbook case, a trading platform would contribute to market
transparency in a price discovery sense, McGroarty said,
but pricing and policy are not the same, he
country that controls around 95% of global rare earths
production, this mechanism is more about
earths policy has recently been characterised by announcements
of unforeseen regulations, such as the news earlier this week
that the country will cut its rare earths capacity by 20%
through the imposition of new production thresholds.
that coming, McGroarty said. A trading platform
will not provide a window on policy, and variables like taking
20% of capacity out of the market will have far more of an
effect on the industry than any trading activity, he
an analyst with UK investment bank Fairfax IS Plc said in an
interview with the BBC that in her view
the exchange is a way of formalising and
controlling their hold on the industry, rather than
loosening their grip.
however, thought that there would be more transparency in the
Chinese rare earths market as a result of having the Chinese
dont think its going to be like other commodities
where you see minute-by-minute pricing ... but it is going to
be a transparent, formal marketplace, she