China's major rare earth producer Inner Mongolia Baotou Steel Rare Earth Group said its net profit slumped 71.71% YoY to CNY 69.38 million in the Q1 of 2014.
According to the company's financial report for the January-March period, its revenue tumbled 52.76% from the same period last year to CNY 1.09 billion. The producer attributed the sharp drop to declines in both sales and prices amid a lackluster market. The shrinking profit was partly due to the World Trade Organization's ruling against China's regulation of rare earth supply.
The WTO said that China's regulation on rare earth exports was inconsistent with the organization's rules, signaling the country may have to further open its rare earth supply in case the WTO keeps its judgement in its final ruling.
An executive from Baotou said producers were worried that the canceling of regulations on exports would compound the struggling sector with a further price slump.
Chinese rare earth producers have suffered since 2011 from continuing price falls due to excessive exploitation, triggering across the sector production suspensions and business mergers, as well as a worsened environment.
Source – Xinhua