Study On The Necessity And Feasibility Of Establishing Rare Earth Futures Market In China

Rare earth is an important strategic resource that cannot be regenerated,and it has broad application prospects in the high-tech field.China is the largest country of reserving,producing and consuming rare earth in the world.The rare earth industry has a good development foundation and development potential in China.However,in the development of China's rare earth industry,there are also many problems such as blind expansion of production capacity,serious environmental damage,lack of international pricing power,and serious deviation of prices from value.As early as 1998,the rare earth problem caused great concern from the government and academic circles.The government intensively introduced a series of policy measures,and the academic circles called for China to establish a rare earth futures market.In this context,this paper focuses on the necessity and feasibility of setting up the rare earth futures market in China,in order to provide decision-making reference for the establishment of rare earth futures market in China.In addition to the introduction,this article is divided into five parts.The second part sorts out the domestic and foreign literature on the function of the futures market,the literature on problems and countermeasures in the rare earth industry,and the literature on the necessity and feasibility of listing new varieties of futures.The third part introduces the distribution of rare earth resources and the development status of rare earth industry.Rare earth resources are widely distributed in China,Brazil,Vietnam,the United States etc,of which China has the most abundant reserves.In China,the rare earth presents a distribution pattern of ?north light and south heavy? that is,the north is dominated by light rare earths and the south is dominated by heavy rare earths.The rare earth industry includes the mining of rare earth,beneficiation,smelting and separation,and the production of new rare earth materials.The industrial chain is long,the product range is large,and the enterprises involved in the downstream are wide.The suppliers of rare earth raw materials are mainly China,Australia,Myanmar,Russia,etc.While the smelting and separating products are mainly produced by China,Japan,the United States,France and so on,of which China's output accounts for about 70% of global production.China,Japan,the United States and so on are major consumers of rare earths,and China's rare earth consumption accounts for about 60% of global consumption.The fourth part is the necessity analysis of setting up the rare earth futures market in China.Futures market has price discovery and hedging functions.Therefore,the establishment of rare earth futures market is the need of China to compete for the international pricing power of rare earth,promote the orderly development of rare earth market and enrich China's futures varieties.In addition,the introduction of open-end rare earth futures can also provide a risk aversion tool for global rare earth traders,and also contribute to the diversification of global rare earth supply.The fifth part analyzes the feasibility of establishing rare earth futures market in China from four aspects: policy,technology,economy,existing problems and countermeasures.China has favorable conditions for launching rare earth futures contracts,but there are certain obstacles.On the product,praseodymium neodymium oxide and dysprosium oxide are easy to store and transport;they have national standards,and the price fluctuation is large,which are in line with the conditions for the listing of new varieties of futures.In terms of policies,the state has issued a series of policies to rectify the rare earth spot market and encourage China's futures market to open to the outside world,which lay a foundation for the future listing and opening up of rare earth futures;economically,the application prospects of praseodymium neodymium oxide and dysprosium oxide are broad,and the market scale is constantly expanding,the number of traders is large,so it has the feasibility of listing.Technically,the platform of Shanghai Futures Exchange is suitable;Baotou Rare Earth Products Exchange and Southern Rare Metal Exchange have trained a group of online traders,and can also copy the internationalization path of China's crude oil futures.These are all beneficial to the listing of rare earth futures,but the market value of the rare earth industry chain is small,and it is vulnerable to the speculation of domestic and foreign financial capital,resulting in instability of the rare earth market.At the same time,China's futures management system is flawed.The "Futures Law" has not been introduced,and there is a lack of internationally recognized rare earth standards.China's futures internationalization level is not high.For these problems,some can be solved in the contract design,and some can be adjusted while practicing,so in general,it is feasible to launch rare earth futures in China.The sixth part is conclusions and policy recommendations.This part believes that during the preparation of rare earth futures,China should improve relevant supporting measures,including the development of high-quality rare earth products,establishing a sustainable strategic reserve of international rare earth resources,and improving China's commodity futures market.