Baotou Rare-Earth halts processing for one month
Shanghai. October 18. INTERFAX-CHINA - China's largest light rare earths producer, Inner Mongolia Baotou Steel Rare-Earth (Group) Hi-Tech Co. Ltd. (Baotou Rare-Earth), will halt smelting and separation for one month starting Oct. 19 to comply with government production quotas and rescue sliding prices, the firm announced Oct. 18.
The move marks the second such suspension by a state-owned rare earth major in China after China Minmetals Nonferrous Metals Co. Ltd. (Minmetals Nonferrous), a leader in heavy rare earths, halted production on Aug. 1.
The moratoriums are partly intended to put the brakes on sliding rare earth prices, which started trending downwards in the second half of July this year after reaching record highs.
Prices had skyrocketed more than 400 percent since May after the Chinese government tightened grip on the sector in an effort to force consolidation, as reported by Interfax.
Previous attempts by Baotou Rare-Earth to fend off the declines, however, have failed to dampen the trend. The firm in September started building reserves of didymium, a mix of neodymium and praseodymium oxide, engineering a slight price rebound.
But that was not enough to prevent prices of neodymium oxide and praseodymium oxide falling by 28.8 percent and 26.1 percent, respectively, since July 20 to RMB 1.48 million ($232,161) and 1.15 million ($180,420) per ton at present, Liu Ruixing, analyst with industry consultancy China Commodity Data Group, told Interfax.
Dysprosium oxide, meanwhile, dropped 25.6 percent during the period to RMB 12.50 million ($1.96 million) per ton, said the analyst.
Despite the declines, rare earth prices remain at a level that continues to put pressure on downstream industries, stifling demand among end-users such as auto makers and producers of magnets, batteries and consumer electronics, Liu noted.
-KHM