Mastering the Commodities Markets

SUPPLY AND DEMAND

In the 1960s and 1970s China started working to develop the technology for chemically separating rare earths. It was also able to benefit from cheap labour, government support and slack environmental codes of conduct. Consequently, when China started production in the 1980s it was able to undercut everyone else with its cheaper prices. An uncomfortable fact is that now China has a massive global dominance in the production of rare earth elements – over 95 per cent of world production is Chinese. For the last 15 years, industries which use REEs in the fabrication of other goods such as plasma TV screens and magnets have become reliant on imports from China and other lower cost producers. This has led to the situation where there ...