The China government has lowered its rare earths export quotas for 2014 by 30% compared to 2013 after the actual export volume last year was lower than its original estimates. Prices of cerium, yttrium and terbium oxide (rare earths used in LED production) dropped 38.1%, 0% and 41.3% on year, respectively, in March and even more compared to their peaks in 2012, indicating that the pricing pressure for LED-use fluorescent powders have already started to ease.
The US, the EU and Japan together filed an appeal to World Trade Organization (WTO) in 2012 claiming China's restrictions for rare earths exports violated WTO's regulations. WTO's ruled in favor of the complainants on March 26, 2014.
Despite the victory in the WTO ruling, the complainants have been seeking ways to reduce their reliance on China's rare earths, since China has tried to use rate earths as bargaining chips in its military and diplomatic negotiations with other countries.
Japan, which has been the biggest importer of China's rare earths, has been seeking alternative sources, such as imports from Australia. Japan has invested in India's rare earth production and has been looking for materials that can replace rare earths.
With China's dominance in the rare earths market starting to wane, rare earths prices have also been affected, Digitimes Research has observed.