(Ecns.cn) – Rare earth prices have not been stable in 2011. As the prices have continued to dive in uncontrollable ways for months, major Chinese rare earth companies have launched a war to ward off further price drops.
On October 18, 2011, the Inner Mongolia Baotou Steel Rare Earth (Group) Hi-Tech Co., China's biggest producer of valuable minerals, announced that it would be halting production for four weeks' time.
As a company that accounted for more than 60% of the global rare earth market in 2010, this move not only immediately affected the rare earth market but also raised international concerns. The British Geological Survey proposed that developed countries should take measures to change the situation and slip the leash of China's supply.
Efforts to stabilize prices
Trade in the precious materials has been shaken quite a bit over the past few months. Since June, the global rare earth market has experienced massive upheavals, with prices of different materials falling sharply by about 25%.
The average prices for rare earth oxides have fallen more than 20% in the past three months, after speculation had sent prices soaring in the first half of the year.
For the domestic market, it has been terrible in October. The price of neodymium oxide declined 34%, and europium oxide slid 35%, while praseodymium-neodymium oxide dropped 11%, compared to the prices before the National Holiday between October 1 and October 7.
China's rare earth industry has soon felt the rising uncertainty. Apart from Baotou's move to prop up sliding prices, some other Chinese rare earth producers also followed suit.
Ganzhou Rare Earth Mineral Industry, a leading rare earth producer in South China, has also decided to suspend production since October 20 at all its mines and smelting and refining enterprises.
It was noted that in August, another producer, China Minmetals Non-ferrous, had called on smaller domestic rare earth separating companies to suspend production.
Financial losses are undoubtedly not the reason for such decisions. These companies aim to stabilize the market by balancing between rare earth supply and demand, and thus encourage a sustainable and healthy development of the industry.
