F REIGN TRADE - 中国国际贸易促进委员会

METALSChina grants extra quotas for rare earth exportsThe Ministry of Commerce announced on May 17 additionalexport quotas for rare earth minerals totalling10,680 tonnes, as China.org.cn reported.Of the added quotas, 9,490 tonnes were light rareearths, and 1,190 tonnes were medium and heavy rareearths, a statement on the MOC website said.The added quotas would be provided to a total of 12companies which had recently passed examinations by theMinistry of Environmental Protection, the statement said.The companies included Baogang Group, the country’slargest light rare earth producer, and the AluminumCorporation of China, the statement said.The quotas would be addition to the nation’s first batchof rare earth export quotas, the statement said.On December 27 last year, the ministry announcedthe country’s first batch of rare earth export quotas totalling10,546 tonnes for 11 qualified companies in 2012.The ministry also noted that companies that had yetto pass the environmental examination would not get theexport rights if they failed to meet the second round of environmentalexaminations before the end of July.China supplies more than 90 percent of the world’srare earth metals, but its reserves only account for aboutone-third of the world’s total.Comment Faced with widespread environmental challenges, it is justified for China to set production caps,stricter environmental standards and an export quota system for rare earth metals in recentyears to protect the environment and preserve the exhaustible resource.New platform gives iron ore traders muscleAn iron ore trading platform madeits China debut on May 8 as the world’sbiggest buyer of the commodity soughtto enhance its price-setting influence,according to China Daily report.Trading volume is expected toreach approximately 100 million tons bythe end of this year. This will accountfor about 14 percent of China’s annualiron ore imports, said Xu Xu, chairmanof the China Chamber of Commerce ofMetals, Minerals & Chemicals Importers& Exporters, one of the organizersof the platform.Just a few minutes after its officiallaunch, the platform saw its first transactionwith 165,000 tons sold for $145a ton, including freight. This was in linewith market expectations, analysts said.China, with a leading role in themarket, has long argued that it shouldhave a greater say in pricing.The platform helps it wrest somecontrol from top miners such as Vale,Rio Tinto and BHP Billiton.The exchange said the platformwill offer contracts settled in US dollarsand yuan. The exchange will chargea commission fee for both buyers andsellers of 0.125 yuan or $0.02 per ton.The exchange has said banks andfinancial firms would not be allowed toparticipate in a bid to stem speculation,and there will be no trading of derivatives.Currently, trading in the spotmarket for seaborne cargoes is done directlybetween buyer and seller. Globalminers e-mail or fax prospective buyerswhenever they sell cargoes via spot tenders,a system deemed efficient and freeof broking fees.Traders say unless China offersincentives, such as tax rebates or commissiondiscounts, they are unlikely tomigrate to the platform anytime soon.The platform has more than 150companies as members so far. Topinternational mining conglomerates,along with major Chinese steel producersincluding Baosteel, Hebei Steeland Wuhan Steel, have all signed up asmembers of the electronic platform operatedby China Beijing InternationalMining Exchange.Zhang Lin, senior researcher ofLange Steel Information ResearchCenter, forecast that the platform willcome into its own when it can attractabout half of China’s imports.Angang Steel, which is a memberof the platform, will put up to 30 percentof the company’s iron ore for tradeon the platform, said Li Daguang, deputygeneral manager of Angang GroupInternational Trade Corp.Foreign miners were adopting await-and-see approach.“We believe the new system willbring more transparency because pricesare not created by the platform, but reflectreal transactions,” said Luiz Meriz,president of Vale Minerals China CoLtd. “So, we are very supportive.”Comment With growth inChinese demandfor iron ore this year slowing,along with the overall economy,the pricing dynamic is changingto China’s advantage, whereasthe last few years have verymuch been a sellers’ market.33