The Wall Street Journal reports that China is building stockpiles of rare earth metals, strengthening its control over the global market and deepening concerns already aggravated by Beijing’s apparently punitive restriction of exports to Japan last year.
Details of the stockpiling plans haven’t been made public. But the outlines of the effort have emerged in recent statements from Chinese government agencies, state-controlled companies and reports in government-run media. The reports say storage facilities built in recent months in the Chinese province of Inner Mongolia can hold more than the 39,813 metric tons China exported last year.
China controls more than 90% of current global supply of rare-earth metals—a group of usually classified as 17 elements and sometimes are called “21st Century gold” for their importance in such high-tech applications as laser-guided weapons and hybrid-car batteries. Beijing has been tightening its exports with a quota policy ….
China in recent years has expanded the number of commodities it holds in reserve. It appears to actively manage their use, but does so with little transparency and sometimes in ways that appear designed to influence market prices, analysts say.
When aluminum prices were soaring in early November, for instance, the State Reserve Bureau blunted the rally by unloading more than 200,000 metric tons of aluminum ingots at as much as 7% below Shanghai Futures Exchange prices. China’s lack of clarity over how exactly it manages its strategic reserves of petroleum has roiled global oil markets and drawn criticism from the International Energy Agency and others.