Since several years ago production of rare earth elements was stopped in the U.S. and other countries China now owns 95-98% of the world’s production capacity for critical rare earth element metals used in producing parts for most high-tech devices. It had been thought that the country had recently cut exports by about 30%. A new analysis of the data shows the actual export cut was 600% greater.
Reuters is reporting that their analysis of Chinese customs office export data shows a major accounting change from reporting “rare earth metal” exports to “rare earth metal and PRODUCTS” exports.
Through the end of 2010 export data was reported for rare earths but starting in January the data included both the metals and products made from them.
According to Reuters, “The effect of the change is to make China’s rare earth exports for the month appear six times bigger than they would have been under the old methodology, and to imply a 44 percent fall in the average value of a ton of exports from December, rather than a 15 percent rise.”
The analysis also shows that exports of rare earth metals to the U.S. (used in producing end products such as magnets) dropped 97% in January over the previous year.
Unless there is some error in reading the data this new analysis indicates that the shortage of rare earth elements is much worse than previously thought.
The analysis by Reuters was conducted using the previously reported data but apparently other analysts had missed the accounting change.