According to analysts, China's move to decrease export quotas for the first half of 2012 is unlikely to have an immediate impact on falling rare earth prices. The Chinese Ministry of Commerce (MOFCOM) reduced official export limits by 27% year on year for the first half to 10,546 tonnes, saying it expects the annual quota to be at roughly the same level as 2011. China's reduced export quotas had a significant impact on rocketing rare earth prices in the first half of 2011, but demand waned in the second half. MOFCOM said that china's rare earth exports totalled 14,750/t in the first 11 months of 2011, accounting for only 49% of the full year's allotted exports. "Large quantities of most export quotas still lay idle," said MOFCOM in a statement, adding: "Even though, confronted with huge pressures of resource, environmental and domestic demand, in order to guarantee international market demand and keep rare earth supplies basically stable, export quota of 2012 are equal to that of 2011." Analyst Anthony Young from Dahlman Rose & Co said the new quotas would likely do little to save falling prices. "We believe that the full year data release could result in pricing pressure for rare earth oxides in the first portion of 2012, as companies will look to sell material prior to Lynas and Molycorp commencing production in mid-2012." Lynas Corp and Molycorp Inc, own the two most advanced major rare earth projects, located in Malaysia and California respectively, which are due to come on-stream in 2012.
