Rising trade frictions lead to tension in rare earth supply chains
With the rise of global trade protectionism and the escalation of trade frictions, in order to gain initiative in the international market, China recently announced that it would double the tariff on rare earth concentrates to more than 25% from June 1.
Because of China's "cascade extraction" (that is, continuous extraction, which can increase the purity of rare earth element separation by more than 99.9%), China has become the only country in the global market with an extraction plant since the 1990s. That is to say, based on technical and cost reasons, even rare earths produced in countries other than China are currently shipped to China's extraction plants for deep processing before they are shipped to overseas markets for further processing.
In order to deal with trade disputes in the international market, China is mainly engaged in trade frictions with the United States, sacrificing rare earth tariff weapons, and also shaking the global electronics industry market. In response to China's rare earth export control policy, Mountain Pass Materials, the only rare earth manufacturer in the United States, warned that its company currently has no relevant extraction capacity available for the US market.
It is estimated that even from the end of last year, US President Trump asked American companies to increase the self-sufficiency rate of rare earths, including the amount of mining and deep processing capacity. Mountain Pass Materials will have to spend a short period of time to build relevant extraction plants. More than one year. Mountain Pass Materials also said that if it is to build sufficient extraction capacity, at least after 2020.
The importance of thorium rare earth in modern industry
Rare earth elements are a collective name for 17 special elements. It is named because Swedish scientists used rare earth compounds when extracting rare earth elements, so they are named rare earth elements. Mainly the lanthanides in the periodic table of chemical elements-lanthanum (La), cerium (Ce), praseodymium (Pr), neodymium (Nd), praseodymium (Pm), praseodymium (Sm), praseodymium (Eu), praseodymium ( Gd), thorium (Tb), thorium (Dy), thorium (Ho), thorium (Er), thorium (Tm), thallium (Yb), thorium (Lu), and elements closely related to the 15 elements of the lanthanide series -17 elements of yttrium (Y) and scandium (Sc) are called rare earth elements.
However, rare earth is a name left over from history. Rare earths have been discovered successively since the end of the 18th century. At that time, people often called solid oxides that are insoluble in water as soil. For example, alumina was called "ceramic clay", calcium oxide was called "alkaline earth" and so on. Rare earths are generally isolated in the form of oxides, which were relatively rare at that time, so they are called rare earths (RareEarth, RE or R for short).
From the perspective of modern science and technology, the "rare earth" element is not a scarce element, and its content in nature is not small. Its content is even higher than some common elements: for example, the abundance of cerium in the earth's crust is similar to that of copper. It is more than 200 times higher than gold.
However, due to the relatively scattered distribution of rare earth elements in the earth's crust, there are few deposits that can be enriched to commercial mining value. And due to similar chemical properties, they tend to form alloy ore in pairs, or symbiotic ore with other elements, and it is not easy to separate each of the rare earth elements. From this perspective, rare earth is still "thin" soil.
Furthermore, during the International Year of the Periodic Table of Chemical Elements, which is the 150th anniversary of the periodic table of elements earlier this year, the European Chemical Society also released a "distorted" periodic table of elements to remind people that some elements are Faced with the danger of disappearing, "it will be difficult for us to obtain them again in less than 100 years or less." Many of these elements are essential for the country to develop cutting-edge technology.
Rare earth elements have three common characteristics: 1. similar atomic structure; 2. similar ionic radii; 3. close symbiosis in nature. The applications of rare earth elements are divided into rare earth catalytic materials, rare earth hydrogen storage materials, rare earth permanent magnet materials, luminescent materials and other rare earth materials. They are widely used in glass, ceramics, metallurgy, military, agriculture, medical, petrochemical, electronic devices, aerospace , Power battery and other industries.
The European Chemical Society says that 17 of these chemical elements used to make smartphones are threatened to disappear in the next 100 years due to excessive mining. Among these elements that are about to disappear are rare earth elements such as yttrium (Y), indium (in), and the like.
How many metal elements are used in a smartphone
Last year, Motherboard disassembled the iPhone and analyzed it. According to the iPhone, aluminum accounted for 24% of the quality of the iPhone, and the second was iron, which "contributed" to 14% of the quality. Copper and cobalt accounted for 6% and 5% of the iPhone's mass, respectively. In addition, rare earth metal elements such as yttrium, indium, and thorium account for less than 1% of the mass, but they are essential for Apple to achieve key functions.
In the "Twisted" Periodic Table of Elements published by the European Chemical Society, there are 31 logos with smartphones, indicating that these elements will be used on mobile phones. For example, indium tin oxide (ITO) used in display screens is a mixture of indium oxide and tin oxide, which is used for transparent conductive films. The cover glass is made of aluminosilicate glass, in which potassium ions play a reinforcing role. In addition, when anti-reflection and anti-reflection coatings are used, various metal oxide coatings are also used. Lithium cobaltate in lithium batteries plays a positive role. Some batteries also contain other metal elements, such as manganese instead of cobalt, and the battery case is aluminum. Some mobile phone casings are made of magnesium alloy, and the shielding cover is made of nickel to reduce electromagnetic interference and is used for mobile phone microphones. The main raw material for copper circuits in circuit boards. Other electronic components also include functional layers and platings such as copper, gold and silver. Tantalum is the main component of microcapacitors. Europium, praseodymium and neodymium are used in microphones and loudspeakers. Neodymium, praseodymium, and praseodymium are used in the vibration unit. Tin, copper, silver and lead are used to solder the internal circuits of mobile phones.
In fact, a special research institution conducted an in-depth analysis of the various elements contained in the iPhone, and found that 46 chemical elements are required to make an iPhone, which is much higher than the "distorted" elements released by the European Chemical Society Number of elements in the periodic table with 31 smartphone logos.
Industry is concerned that China's rare earth control policy will affect Apple shipments
In July last year, US President Trump wanted to impose a 10% tariff on China's rare earths, but after evaluating the relevant impact, he removed the rare earths tax list from September. At the end of the year, the US industry was required to step up its efforts to rebuild the rare earth supply chain.
Key applications for rare earths include permanent magnets, catalyst converters, electronic parts, abrasive polishing powders, water treatment chemicals, and more. Important application industries include automotive, electronics and appliances, automation and defense systems, wind engines and oil and gas refining.
A recent research report issued by Goldman Sachs analysts pointed out that Apple is likely preparing to complete this year's new iPhone production capacity plan in advance so that the latest series of products released in the fall can be listed on the market. In other words, Apple substantially added new iPhone orders for the next June and July to prevent the untimely impact of Sino-US trade friction.
Last year, Apple also moved the capacity of new machine orders for two months because of the impact of Sino-U.S. Trade friction, which caused significant fluctuations in the capacity of upstream suppliers. If Apple's order policy is really what Goldman Sachs analysts say, then this year's Apple supply chain manufacturers will usher in roller coaster-like fluctuations in Apple mobile phone orders.
And these suppliers have just passed the capacity adjustment brought by Huawei's more than half a year of additional capacity in response to the US trade policy bounce.
Goldman Sachs also warned the industry that even if Apple can adjust its order cycle in the short term to overcome this year's difficulties, if the global trade environment continues to deteriorate, Apple's upstream supplier's electronic component manufacturers will continue for a long time in the future. Will face similar effects from China's rare earth policy.