The Chinese government has released a draft plan for introducing a tracking system to crack down on unauthorised production of rare earths.
The draft plan, which was published by the country's ministry of industry information technology on 14 June, seeks to compulsorily include the producer's name on a rare earth material package, as well as product logo and transportation and storage information.
Almost all rare earth materials could be affected, including rare earth ores, single oxides, mixed oxides, single metals, mixed metals, alloys, magnetic materials, hydrogen storage materials, luminescent materials, polishing powder, magnetic refrigerant materials, catalysts and exothermic materials.
The ministry is accepting public comments on the plan until 15 July. Implementation dates are not yet available.
The move is expected to reduce surplus supplies in the market and prevent prices from falling in the longer term. Beijing has imposed a special value-added tax invoicing system to clamp down on illegal trading of rare earths since June 2012.
The draft plan came after major domestic rare earth producers called on the government to strengthen its control on exports and further crack down on illegal mining, at a meeting held by the country's main economic planning body the NDRC on 5 June.
Unauthorised rare earth production in the country is estimated at as high as around 60,000 t/yr, compared with an authorised output of 120,000 t/yr. These additional supplies have prevented prices from rising over the past few years.
Spot rare earth prices have risen over the last few weeks following Chinese President Xi Jinping's visit to a rare earths plant in south China's Jiangxi province on 20 May, which market participants see as an indication that Beijing may use rare earths to pressure Washington amid their escalating trade war.
Beijing is also expected to introduce more supportive policies to boost the rare earths market, such as a national stockpile purchase in the near term.
The NDRC reiterated today at a press briefing that the Chinese people will never accept the US using products made by China's exported rare earths to counter and suppress China's development. This was previously echoed by a commentary in the state-run People's Daily newspaper on 29 May.
China exported 53,000t of rare earths last year, around 45pc of its total production of about 120,000t. China accounts for more than 90pc of global supplies of rare earths, while 70-80pc of all US imports of rare earth oxides and metals come from China.
