Slashdot Mirror
Chinese Rare Earths Producer Suspends Output
concealment writes "State-owned Baotou Steel Rare Earth (Group) Hi-tech Co. said in a statement released through the Shanghai Stock Exchange that it suspended production Tuesday to promote 'healthy development' of rare earths prices. It gave no indication when production would resume and phone calls to the company on Thursday were not answered. Beijing is tightening control over rare earths mining and exports to capture more of the profits that flow to Western makers of lightweight batteries and other products made of rare earths. China has about 30 percent of rare earths deposits but accounts for more than 90 percent of production. Beijing alarmed global manufacturers by imposing export quotas in 2009. It also is trying to force Chinese rare earths miners and processors to consolidate into a handful of government-controlled groups."
China is finally flexing its grip on the tech industry, more to come certainly.
Unix, an obscure operating system developed by bored researchers in an attempt to get a better game playing experience.
Start putting tariffs on anything made with Chinese rare earths. Since China is a net exporter, they have the most to lose playing these games.
They're capitalists, with all the dirty trappings and failings of western businessmen, only without the whole problem of human rights.
Someone probably needs to remind these people that artificially manipulating prices like this can get burned badly in the end.
China has about 30 percent of rare earths deposits but accounts for more than 90 percent of production.
It sounds like we should consider mining from the other 70 percent.
He's promoting healthy development of his stock's price.
They feared that it could be used to suppress protest or support unpopular rule.
Or just re-open the closed rare earth mines in the US. Rare Earths are really not that "rare". The US closed it's most productive mines for environmental reasons and because it was cheaper to purchase from abroad. Same reason domestic oil production was reduced. Of course the US is now pumping approximately 10 million BPD and is expected to surpass Saudi Arabia in as little as 4 years using newer extraction methods is also something to look forward. China's economic forecasts have always been predicated on best case scenarios as well as their government making the optimum decisions every time but their government is no more immune to stupid decisions than any other government in the world.
America exports the worlds supply of helium, hasnt produced a millilitre more for over 2 decades, and keeps the price artificially low.
OPEC sets quotas and prices for global oil supplies, and can suspend or restrict production whenever they feel the need.
American agricultural conglomerates like ADM and General Mills collude to set the price at which they will accept corn from farmers. too much corn does not drive the price of it down, instead its maintained by dumping cheap corn as an export, or siloing it for next year.
how has china in any way changed how capitalism has worked for the past 270 years? The only thing thats generated outrage is chinas willingness to take an aggressively competitive position in the global economy, instead of a subservient one. If you dont like it, consider pushing for more organized labor.
Good people go to bed earlier.
This is simply inevitable. China has been producing rare earths at unsustainable and artificially low prices, which is why the rest of the world no longer needed to bother with mining and consuming their own finite resources.
Everyone needs to grasp that this is an inevitability - the prices of various products (mainly higher technology) will have to go up, and thus the global markets and product will rebalance themselves. The manipulation was already done in keeping the prices too low, not in making them go up. Your complaints are coming way too late in this game - you should have been complaining at least a decade ago when they flooded the market with cheap resources, not now that the bubble has burst.
Say a new hot dog stand opens up in town, and for the first month they sell hotdogs for 25 cents at a massive and unsustainable loss. Maybe that's long enough to run the other hot dog stands out of business, or at least make them realize it's just not worth bothering with. Then after the introductory price they go up to where the market belongs. Now at that point the other hot dog stands can re-open, with new owners or with their old owners - doesn't really matter. At the end of the day it's all the same end result - hotdogs cost what they're worth.
My question is this - was it wrong for the rest of us to enjoy hotdogs for only a quarter apiece while we were able to? My opinion is no, that's not wrong of us, nor is it wrong that the world enjoyed lower priced rare earths (and thus technology) because of China's willing sacrifice of their finite resources.
Better known as 318230.
Step 2. Watch as almost everyone else gets out of the business because they can't profit at your price, leaving you with 90% of the market.
Step 3. Now try to increase profits. When you realize you can't raise prices because the other 10% undercut you and make most of the profit, cut off production entirely.
Step 4. Watch as the other 10% raise prices (to the level you wished you got) and make a profit at your expense. Then watch as they expand, cutting your original market share from 90% to 70%.
excitingthingstodo.blogspot.com
The problem with midwest steel wasn't largely dumping (there was some, but it was a fairly small percentage of the market), it was the fact that most of the steel plants were 40+ years old with few updates and they were competing with more modern plants using more efficient techniques and more automation. Steel consumption also was on the decline, from 1982-2008 the US only consumed about 45M metric tons of steel per year, the same amount as we did in 1941 and about half what we did in 1972. Today we produce about as much steel as we did in 1974 but we do it with less than 1/3rd the workforce, modern mills just aren't as labor intensive as the old ones and while that's bad if you're a worker unable to find a replacement job at comparable wages it's good for the economy overall.
There are 4 boxes to use in the defense of liberty: soap, ballot, jury, ammo. Use in that order. Starting now.
BTW it was my understanding America used to be the major provider over a decade ago and we simply stopped. Shows this was a bad idea.
Not if your intention is to let the competition use up their supply while ensuring your own in the the future.
It's funny that you are using US steel as an example, because that one is a textbook example of multiple industries being killed off by thoughtless use of tariffs and outright import bans. To elaborate on this, some decades back tariffs and bans on importation of general purpose steel were put in place to protect the US steel industry, which was functioning well at the time but did not want to be undercut by low quality imports. Without the threat of competition US steelmakers had no need to innovate and had the ability to increase prices. Eventually they got to the point where other countries could undercut US low quality general purpose steel with higher quality specially steels even after paying the tariffs - hence the "dumping" of steels with added nickel to make them stronger than general purpose steel and get around the ban. Making steel does not need many worker hours per ton so China should have had zero advantage, but a protected steel industry had gone to sleep and not only failed to improve, but also increased costs.
That was the direct effect. The indirect effect was the migration of industries that were heavy users of steel out of the USA so they would not be stung by the markup on steel prices from the cosy little club of US steelmakers (that was the start of the offshore outsourcing of manufacturing the USA is suffering so much from now). Eventually that protected little club found that their greed had backfired and they had very few customers. The only ones that thrived were innovating, making high strength steels, and able to compete effectively on a level playing field in an international market. I was in the steel industry briefly in the early 1990s (not in the USA and we could not sell our stuff to the USA), so got to see the how bad it had become.
Sugar is the other US textbook case of overprotecting an industry and the industry thinking that it's survival was thus assured and that they could charge whatever they wanted - hence you guys drinking corn syrup in your coke and mucking up your kids livers at twice the rate than if they were drinking sucrose in their coke.
In short, protecting industries can really suck in the long term and the protected industries can get to the point where they are welfare addicts that have no hope of survival without a government propping them up.