Part I: Measuring Dependence on Chinese Minor Metals
Whether they produce water treatment chemicals with lanthanum chloride, antifriction alloy bearings using antimony metal or any other of the countless minor metal end-products, these manufacturers all have one thing in common, their raw materials more likely come from China than from any other country.
China currently produces about 40 percent of the world’s minor metals, a share that has been steadily increasing over the past ten years. Manufacturers who require minor metal products are well aware of the influence that Chinese supply has on the price of many metals, but not all are conscious of critical changes that have recently effected both the availability and prices of numerous minor metals.
Two of the most important changes for the minor metal industry since 2000 have been the increase in China’s share of global minor metal production and government policies within China aimed at supporting domestic production and ensuring material availability for Chinese end-users. These developments have not only led to international reliance on Chinese supplies of strategic metals, but have also resulted in greater Chinese control over minor metal prices.
Over the past two years, the rare earth industry has received much media attention because it epitomizes these issues, igniting western concern about heavy reliance on foreign sources of critical resources. However, as we examine in this report, these issues stretch beyond rare earths, affecting many minor metal supply chains and a wide-range of industries. Only recently have companies and governments recognized this situation and begun discussing methods to avoid supply shortages.
In the first part of this three-part report on the effect of China’s role as a key supplier of primary minor metal products, we analyze recent minor metal production trends while focusing on China’s growing role as the world’s major producer. Part two of the series will examine the factors behind growing dependence on China for minor metal production with consideration for both Chinese domestic policies and macro-economic influences. Finally, in part three, we will develop on the impacts of the increasing dependence on Chinese minor metal production and discuss the responses from, and options for, international end-users to reduce the consequent effects of price volatility and risk of supply disruptions.