January 19, 2011 / 5:06 AM / 9 years ago

REFILE-UPDATE 2-China 2010 rare earth exports slip, value rockets

 (Refiles to fix day in 19th paragraph)	
 * China has cut export quotas for 1st half of 2011 by 35 pct
 * No decision yet on full-year quotas for this year
 * Rare earth adds to list of trade issues as Hu, Obama meet

 (Recasts, updates throughout, adds byline)	
 By Tom Miles and Ben Blanchard	
 BEIJING, Jan 19 (Reuters) - China's exports of vital rare
earth elements used for numerous high-tech goods slipped almost
one-tenth last year but the overall value rocketed as quota cuts
lifted international prices, data showed on Wednesday.	
 China, which produces about 97 percent of the global supply
of the minerals, cut export quotas for the minerals by 40
percent last year, a move that alarmed buyers and trading
 It has cut export quotas for the first half of 2011 by 35
percent from the first half of last year, although total quotas
for this year have not yet been announced. China says the quota
cuts will prevent reckless and polluting mining of deposits.	
 China's moves have raised heckles in major trading partners
such as the United States, European Union and Japan. The U.S.
Trade Representative office threatened last month to take China
to the World Trade Organisation about its export restraints.
 The rare earths issue adds to the growing list of
trade-related disputes between China and the United States,
including U.S. complaints that China's currency is undervalued,
as President Hu Jintao starts a state visit to Washington.
 China exported 4,738 tonnes of rare earth metals, ores and
compounds in December, more than twice as much as in November,
bringing its full-year export volume to 39,813 tonnes, according
to data by China Customs Statistics (CCS) Information Center,
Hong Kong, an authorised supplier of Chinese customs figures. (www.eiahk.com/consult_e.html)	
 The export figures were well above the 2010 quota of 30,258
tonnes. The additional exports may reflect shipments early in
the year that were registered under unused 2009
 Low international demand for rare earths in 2009, thanks to
the financial crisis, may have contributed to the decision to
drastically cut 2010 quotas. But by the time the cuts were
announced in the summer, demand had recovered and trading was
thrown into disarray.	
 U.S. makers of high-tech products such as Apple Inc's
 iPads and various Japanese companies have been
scrambling to secure reliable supplies of the minerals outside
of China as Beijing steadily reduces export allocations.	
 As volumes shipped out of China have dwindled, the value of
trade has soared. December's tonnage was down by almost
two-thirds from December 2009, but the value rose four-fold to
$309.2 million on a free-on-board basis.	
 That has helped meet other goals of China's policy of
controlling exports of rare earths and other minor metals -- to
raise their price internationally and lure more secondary
industry to set up shop in China.	
 The value of 2010 exports soared to $939.7 million, three
times the $310.1 million China earned from the trade in 2009.	
 December's exports were valued at an average of $65,257 per
tonne, the culmination of five months of rapid price increases.
In July, the value per tonne was $14,405 but that figure rose by
an average of more than $10,000 in successive months.	
 On Tuesday, Chinese Commerce Ministry spokesman Yao Jian
reiterated that the government had yet to decide full-year
quotas for rare earths.	
 "China will continue to supply rare earths to the
international market and manage export quotas in accordance with
WTO regulations," Yao said, adding the 2011 full-year quota
would be announced "in a timely manner".	
 He also welcomed moves by the United States and Australia to
increase their own production of rare earths, something which
has picked up pace since China began cutting its exports.	
 "This will effectively safeguard global supplies," Yao said.	
 China is also stepping up its controls over rare earths
mining and plans to release new industry standards to combat the
extremely polluting practices of its miners. 	
 The Ministry of Land and Resources said on Monday
 that it would set up special zones to better regulate rare
earths mining.	
 Wind turbines and hybrid cars are among the biggest users of
rare earth minerals, a little-known class of 17 related elements
that analysts say are facing a global supply crunch as demand
swells. The minerals also are used in some weapons systems.	
(Editing by Lucy Hornby and Yoko Nishikawa)	
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