China – the number 1 in the production and trade of metallic raw materials

China is one of the most resource-rich countries in the world. The Middle Kingdom is home to a large part of the metallic raw materials that are indispensable for a wide variety of industries.

It is not least this wealth of raw materials that has contributed to China’s rapid rise as an economic power. But the Chinese have also done a lot to ensure that the country has long since overtaken the USA and the EU in the production of and trade in metallic raw materials.

Since the turn of the millennium, China has been on the fast track

As studies show, the amount of aluminum, steel and nickel produced and processed in China has multiplied since the turn of the millennium. In the EU, the volume of raw materials has remained constant since then, and in the USA it has even declined.

The global expansion of commodity trade has also just exploded for China since then. In 2002, for example, the bulk of China’s foreign trade in metallic raw materials was still limited, almost without exception, to neighboring Asian countries.

Meanwhile, the Asian country conducts its commodity trade with almost every country in the world and is the undisputed number 1 in the production and trade of metallic raw materials. Global commodity prices and also supply chains are therefore largely dependent on the Middle Kingdom.

Rare earths in China

The majority of rare earth metals are found in China. The group of 17 chemical compounds is, without exception, virtually indispensable for a wide variety of technologies and industrial applications from airplanes to smartphones around the world.

Rare earths are stored in small quantities in a wide variety of minerals or are contained in them as admixtures. Basically, they can be found all over the world. However, even in the rare earths sector, most of the world’s production takes place in China.

Currently, more than 60 percent of all rare earths are produced in China. For individual elements from the rare earth group, the production share is even higher. For example, 90 percent of the element neodymium is produced in the People’s Republic.

The painful dependence on China

The Corona pandemic, at the latest, has once again made it painfully clear to many countries of this world that the almost total dependence on China in terms of commodity trade can have far-reaching consequences for individual economies and world trade.

As a result, there are increasing attempts to disentangle the supply chains and to bypass the People’s Republic of China as best they can. However, China has done quite a bit over the past 20 years, and most importantly, has accepted some glaring and questionable disadvantages, to become the world leader in commodity trade.

This is particularly evident in the extraction of rare earths. Rare earth exists all over the world, but its extraction is not so simple and, above all, laborious and questionable.

However, China established its first institutes to study mining as early as the 1950s. For this purpose, the country was and is prepared to accept the harmful effects on the environment. So it will not be so easy to oust China from its champion position in commodity trading in the future either.




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