{"id":1431612,"date":"2023-10-09T07:30:00","date_gmt":"2023-10-09T11:30:00","guid":{"rendered":"https:\/\/bugaluu.com\/news\/?p=1431612"},"modified":"2023-10-09T07:30:00","modified_gmt":"2023-10-09T11:30:00","slug":"rare-earth-prices-skyrocket-following-burmese-mining-suspension","status":"publish","type":"post","link":"https:\/\/bugaluu.com\/news\/rare-earth-prices-skyrocket-following-burmese-mining-suspension\/1431612\/","title":{"rendered":"Rare Earth Prices Skyrocket Following Burmese Mining Suspension"},"content":{"rendered":"

Rare Earth Prices Skyrocket Following Burmese Mining Suspension<\/span><\/p>\n

\n

Authored by ‘Metal Miner’ via OilPrice.com,<\/em><\/a><\/p>\n

Myanmar’s Kachin State, supplying 38% of China’s rare earth imports, halted mining, causing an immediate spike in global prices.<\/p>\n

The long-term effects of this suspension might lead to scarcity, illicit mining, and environmental issues in the region.<\/p>\n

China’s economic slowdown combined with geopolitical risks highlights the need for diversified sourcing in the rare earth market.<\/p>\n

The\u00a0Rare Earths MMI (Monthly Metals Index)<\/a>\u00a0witnessed yet another steep increase month-over-month. Indeed, supply disruptions remain a massive concern in the rare earths industry<\/strong>, so rare earth magnets and other materials witnessed renewed bullish strength across the board over recent months.<\/p>\n

<\/a><\/p>\n

In August, market worries arose prior to a planned environmental inspection of China\u2019s Jiangxi province. The Chinese region serves as a major location for Chinese rare earth supplies. Along with this, Chinese stimulus efforts managed to boost rare earth production (although this cannot add long-term support to the index).<\/p>\n

Following this, Myanmar\u2019s Kachin State suspended mining activities. Myanmar (formerly Burma) is a pinnacle producer of global rare earths and rare earth magnets, and any change in Burmese mining activity can significantly alter the market. Therefore, the mining suspension led to stockpiling ahead of peak consumption and caused Chinese rare earth prices to hit their highest point in over 20\u00a0months<\/a>.<\/p>\n

As a result of all of this, the index jumped up by 6.62%<\/p>\n

<\/a><\/p>\n

How Will the Burmese Mining Suspension Impact Rare Earth Prices Globally?<\/h2>\n

From January to July 2023, Myanmar\u2019s Kachin State supplied 38% of rare earth materials imported by\u00a0China<\/a>. Despite this, mines in the Burmese state shut down in early September to prepare for inspections. This shutdown raised anxiety about supply interruptions and prompted the hoarding of rare earth materials worldwide.<\/p>\n

For now, analysts expect the recent mining restriction in Myanmar\u2019s Kachin State to have the most impact in the short term. However, it could also affect long-term rare earth pricing.<\/p>\n

Short-Term:<\/h3>\n

Pricing has already factored in the immediate effects of the mining ban. Still, rare earth prices will continue to see support from the long-term supply disruption and stable demand\u00a0outlook.<\/a>\u00a0<\/p>\n

Fear of higher prices will also drive increased demand in the fourth quarter of 2023, as rare earth consumers stockpile cargo for use during China\u2019s public holiday from September 29 to\u00a0October 6<\/a>.<\/p>\n

Long-Term:<\/h3>\n

While the long-term effects of the mining restriction remain unknown, it could result in a scarcity of rare earth minerals, further increasing\u00a0costs.<\/a>\u00a0\u00a0<\/p>\n

The restriction might also lead to increased illicit mining, which is already a significant problem due to China\u2019s control over rare earth mining in Myanmar. Over time, this could exacerbate environmental issues in the region and lead to political\u00a0unrest.<\/a>\u00a0<\/p>\n

Additionally, the restriction could eventually cause harm to Myanmar\u2019s economy and its mining sector workforce.<\/p>\n

Global Rare Earth Trading Dynamics Changing<\/h2>\n

China\u2019s sluggish economy has negatively impacted rare earth prices for months, even without the Burmese mining ban.<\/strong> Therefore, a rise in Chinese economic activity could benefit the market. However, recent predictions indicate that China\u2019s economy will slow down in 2024 due to ongoing domestic challenges and a lackluster\u00a0property\u00a0<\/a>sector<\/a>.<\/p>\n

While China\u2019s property sector does not directly influence the production of rare earth magnets, a potential \u201cdomino effect\u201d could continue to harm the pricing of industrial metals that rely on Chinese imports.<\/p>\n

China\u2019s rare earth policies have long affected the market power and pricing of\u00a0rare earth metals<\/a>. <\/strong>Private Chinese enterprises engaging in intense rivalry lowered rare earth prices during the first two decades of their worldwide availability. China then started reducing rare earth shipments in\u00a02006<\/a>, citing the need for resource conservation and environmental concerns, which resulted in a sharp increase in\u00a0rare earth prices<\/a>.<\/p>\n

Geopolitical Risks Heavily Tied into Supplies of Rare Earth Magnets<\/h2>\n

China\u2019s current economic slowdown has substantially impacted the rare earth elements market. It has also emphasized the necessity of diversifying sourcing and the risks associated with excessive dependence on a single country for essential raw materials<\/strong>. Indeed, as China\u2019s domestic demand for rare earths increases, the nation will rely more and more on imports from countries like Myanmar to meet its resource\u00a0requirements.<\/a><\/p>\n

Interestingly, a recent study utilizing the wavelet decomposition method established a link between rare earth price fluctuations, geopolitical risk, and global economic activity. According to this study, there is a positive correlation between rare earth pricing and global economic activity. This implies that a slowdown in China\u2019s economy may lead to a drop in rare earth prices. However, the study also found an inverse relationship between the price of rare earth magnets and geopolitical risk, suggesting that political unrest in China could instead cause\u00a0rare earth<\/a>\u00a0prices to rise even more.<\/strong><\/p>\n<\/div>\n

Tyler Durden<\/a><\/span>
\nMon, 10\/09\/2023 – 03:30<\/span><\/p>\n

\u200bhttps:\/\/www.zerohedge.com\/commodities\/rare-earth-prices-skyrocket-following-burmese-mining-suspension<\/a>\u00a0<\/p>\n

\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"

Rare Earth Prices Skyrocket Following Burmese Mining Suspension Authored by ‘Metal Miner’ via OilPrice.com, Myanmar’s Kachin State, supplying 38% of China’s rare earth imports, halted…<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1431612","post","type-post","status-publish","format-standard","hentry","category-news","wpcat-1-id"],"_links":{"self":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1431612","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/comments?post=1431612"}],"version-history":[{"count":0,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1431612\/revisions"}],"wp:attachment":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/media?parent=1431612"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/categories?post=1431612"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/tags?post=1431612"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}