China’s Rare Earth Industry Lacks Pricing Power, Improving Products’ High Added Value has Become the Top Priority

At present, with the imbalance between rare earth production and sales, competition among same category products in China is becoming increasingly fierce, it is exactly due to this reason that users’ concern began to shift from rare earth cheap prices to products’ overall value.Against such trend, rare earth manufacturers should try to grasp more “opportunities” from the current crisis awareness, and as quickly as possible guide rare earth products to extend toward high end, and continually improve high added value of relevant products.

Take the new rare earth LED luminescent material developed by Chinese scientific research personnel as an example. Changchun Institute of Applied Chemistry and Sichuan Sunfor Light Co., Ltd jointly carried out R&D of new AC LED lighting technology in 2006, after over 6 years of continual exploration and development, they have developed a new rare earth LED luminescent material, which recently passed achievement appraisal organized by the Chinese Academy of Sciences.

It has been learned that this product effectively resolved the AC LED lighting problem which has never been overcome by the global industry before, making China the only country to master this technology worldwide. LED lighting marks another revolution in lighting source following the invention of incandescent lamp and fluorescent lamp, and is recognized by the global community as an effective lighting solution with the greatest development prospects.

In fact, it has been acknowledged by the rare earth industry that what can truly create continual huge wealth for the rare earth industry is the rare earth new material processing field with high added value and high technology contents. In the process of improving the added value of rare earth products, improving rare earth hi-tech standard is particularly important.It is absolutely not a sales approach, nor is it merely technology development, and is instead a significant extension of rare earth products toward high end development.

In the past two years, rare earth prices experienced frantic sudden price rise and price fall.Nowadays the entire rare earth market has few transactions; there is a prevalent wait-and-see atmosphere. Although China boasts top reserve of rare earth resources, it has not acquired rare earth pricing power. Coupled with inadequate policy support, chaotic exploitation and smelting, as a result there are surplus in smelting capacity and waste of resources, so that Chinese enterprises can only earn profits of products with low added value.

Relevant chief persons of the MIIT indicated on a number of occasions that, China has been making efforts to increase the production capacity of manufacture industries with rare earth as raw material, but for a long period in the past rare earth industry was troubled by backward R&D of high-end applications, low resource utilization rate, and small size and poor standard of application industry, consequently the state government will intensify supporting efforts.

When the rare earth industry meets crisis, improving rare earth’s high added value is a matter of top priority. Changchun Institute of Applied Chemistry and Sichuan Sunfor Light Co.,Ltd have invested labor and resources to develop rare earth products with high added value at a time of difficulty, such practice deserves praise. We must develop and produce more rare earth products with high added value, and grab the initiative of the global market.

In the past, we only produce rare earth raw materials, which would be processed by overseas enterprises in Japan and South Korea to manufacture products, and then sold back to China.Now that we have such technology, we can carry out rare earth downstream processing, and there will be no need to sell rare earth raw materials only to let overseas enterprises to earn huge profit.