China’s regulators are trying to cool down the price rally of rare earth, which has seen a sustained price increase since the beginning of this year, after five years of downturn, according to a Chinese newspaper.
The National Rare Earth Office issued a statement on Aug 8 to the six largest rare earth groups in China, including Aluminum Corporation of China Ltd and China North Rare Earth (Group) Hi-tech Co Ltd, asking them to help stabilise the rare earth market, according to industry insiders, the China Daily reported.
The statement asks the six groups to promote healthy development of the rare earth market, by strengthening industry self-discipline, maintaining production and operational order and strictly following the production control plan, it said.
In 2011, fast-rising prices forced firms out of sector, triggering 5-year slump
Part of the reason for the rapid rise in prices since June has been a lack of co-ordination in price settings and the stocking up of supplies in the rare earth market, the report said.
Another reason for the rising price from January to May is that China has eliminated capacity by closing many illegal factories, an analyst said.
Data shows that the average price of praseodymium-neodymium oxide has increased 54 percent in 2017, and the price has risen more than 36 percent in the past two months.
At the same time, the listing prices of the six largest groups have also gone up in conjunction with the continued price rise of rare earth.
The monthly listing price of praseodymium-neodymium oxide from the China North Rare Earth is 420,000 yuan per ton in August, an increase of 53 percent from April’s 293,000 yuan per ton and a surge of 27.3 percent month-on-month, China Daily said.
The surging prices of rare earth products may harm the whole industry by squeezing downstream firms, the analyst said.