Shipping Rare-Earth Materials from China

urlWhether you realize it or not, rare-earth materials are found in numerous products that consumers and organizations use daily. Examples, such as scandium and cerium, are found in smart phones, automobiles, green energy products and national defense technologies. China, being a top supplier of rare earth materials, dominated the market to the point that they enforced a quota system for exports of rare-earth materials. In 2010, with a quota system still in place, China did something bold: they increased prices for rare-earth materials by as much as 10 times the original price. The reason they gave for this decision was because of the pollution from the mining for the materials. Even though those supply chains that depend on these rare-earth materials from China received ocean freight shipping rates for the transportation costs, their overall costs jumped because of the price increases for the materials.

Immediately, trade partners in Europe, Asia and the United States disagreed with the high price increase. There was a massive argument with China at the World Trade Organization in 2013, with claims that China was breaking the rules. Upset with the price increase, numerous companies around the globe began locating their rare-earth materials from other nations. As a result, China’s rare-earth material market share dropped from 93% to 86%.

With pressure from the World Trade Organization, and pressure from national officials who want their government to limit their economic role, China closed their quota requirements for exports of rare-earth materials in 2014. Now, many companies are working with the top freight forwarders to organize a transportation plan for shipping those rare-earth materials overseas.

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