A leading supplier of metallurgical consumables to the iron, steel and aluminium industries.
In 2009, The US, EU and Mexico brought a case against China before the World Trade Organisation (WTO) for the imposition of export restrictions on bauxite, coke, fluorspar, magnesium, manganese, silicon carbide, silicon metal, yellow phosphorus and zinc. These materials are used extensively in the steel, aluminium and chemical industries.
On 30th January 2012, the WHO upheld its findings in July 2011 that China had engaged in imposing export restrictions which were contrary to China's WTO Accession agreement and to the General Agreement on Tariffs and Trade (GATT). The effect of such restrictions is to inflate the cost of raw materials used in the global steel and other industries, thus giving local Chinese producers an unfair advantage.
Disappointingly, Rare earth metals were not part of the WTO's ruling, but users of rare earth metals used in the renewables and high-tech sectors hope that China will also scrap export limits on these commodities, leading to higher volume and lower prices. Analysts say that even if China removes export quotas, it is unlikely to lift its production limits, which are meant to limit environmental damage from rare earths mining and keep prices and profits high.
China had cited environmental reasons for justifying the imposition of export restrictions on bauxite, coke, fluorspar, magnesium, manganese, silicon carbide, silicon metal, yellow phosphorus and zinc. However, the WTO found that China had been "unable to demonstrate" that its' restrictions helped conserve resources, cut pollution or improve public health.
In 2004, China successfully used a similar strategy when imposing quotas on coking coal exports. Despite the threat of WTO action, exports have dwindled from 10 million tonnes a decade ago to 3.6 million tonnes last year, and it is now a huge net importer. China's WTO mission to Geneva said it "deeply regretted" the WTO's findings but said it will comply with the organisation's findings. The European Commission however issued a statement saying that the EU "continues to be deeply troubled by China's use of export restrictions''.
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