Rare-Earth Materials - a win-win Situation for China?

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New report on the world linear and torque motor market

Rare-Earth Materials - a win-win Situation for China?
Rare-Earth Materials - a win-win Situation for China?

According to the new report on the world linear and torque motor market by IMS Research the biggest threat to the market is the continuity of supply of rare-earth magnets. It is widely accepted that China produces 97% of the world’s rare-earth material and so controls the world market for it. According to China Custom Statistics, in 2010 China exported 39,813 tonnes of rare earth material, much less than the nine-year average of 60,000 tonnes a year (As estimated by www.chinamining.org).
Furthermore, according to latest press reports, the Chinese Government intends to cut export quotas of rare earth material by 35% for the first half of 2011. The market for linear and torque motors had recovered to pre-downturn levels by the end of 2010 and is set for further strong growth in 2011 and 2012. How are direct-drive motor manufacturers going to ensure continuity of supply of rare-earth magnetic components; and what is the motivation behind the Chinese Government’s manipulation of rare-earth supply? Is it simply driving up the price of a commodity under its control; or is it looking to increase local value-added production and level of technology?

The increasing number of direct-motor manufacturers opening production facilities in China or entering into partnerships with Chinese companies to produce rare-earth magnetic components suggests the latter. With the price of rare-earth material increasing with restricted exports, China is making a healthy profit made from those companies that choose to import rare earth raw materials - a win-win situation.

Posted on February 4, 2011 - (4720 views)
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