January 31, 2012
BEIJING (Reuters) – A World Trade Organisation ruling against China’s restrictions on raw material exports could force changes to some of its rare earth policies but is unlikely to yield the boost in exports of the metals that consumers want to see.
A WTO panel on Monday said China violated global trading rules by restricting exports of raw materials like bauxite, coke, magnesium, manganese and zinc, which inflated prices and gave domestic Chinese firms an unfair competitive advantage.
Rare earth metals were not part of Monday’s ruling, but users of the crucial group of 17 elements used in the renewables and high-tech sectors hope that China will also scrap export limits on these commodities, leading to higher volume and lower prices.
They are likely to be disappointed.
“It is still too early to say what the impact will be but I can’t see it having a big impact on prices — the main issue will still be supply and demand,” said Vivian Pang, an analyst with the Asian Metal consultancy in Beijing.