Strategic Metal Report

China's Growing Role in the Production and Supply of Minor Metals: Part III

 Part III: Responses by International End-Users

Increasing dependence on Chinese minor metal production has forced end-users to consider how best to deal with greater price volatility and a heightened risk of supply disruptions. In part one of our series on the effect of growing dependence on Chinese production and supply of minor metals, we showed that China’s share of global minor metal production rose 34 percent between 2000 and 2009. In part two, we outlined the key factors in this rise, including natural resource reserves, domestic manufacturing growth, as well as industrial development, environmental and export policies, and concluded that the major impacts on end-users are an increase in price volatility and a greater risk of supply disruptions. In this, the final part, we will discuss the options available to end-users in order to deal with price volatility and risks of supply disruptions.

China's Growing Role in the Production and Supply of Minor Metals: Part II

 

 Part II: Factors, Impacts & Trends - Analyzing the Growing Dependence on Chinese Minor Metal Production

The minor metals industry is not the only industry to see a large share of its global production move to China over the past ten years. Yet, unlike most manufacturing industries, minor metals do not have the freedom to change locations simply to capitalize on low production costs. Natural resource extraction, it goes without saying, is inherently dependent on the local geology. Why then, has the global production of minor metals become significantly more dependent on China over the past ten years? In the first part of our series on the effect of China’s growing production and supply of minor metals, SMI Ltd. concluded, based on the most recent USGS statistics, that China’s share of global minor metal production increased from just over 29 percent in 2000 to nearly 40 percent in 2009. In this, the second part, we will outline the main factors why this shift has occurred, before discussing its impacts on end-users and analyzing trends that may influence the industry over the coming five to ten years.