China Baotou to Halt Rare Earth Operations for One Month
BEIJING—Inner Mongolia Baotou Steel Rare-Earth (Group) Hi-Tech Co. said Tuesday that it would suspend smelting and separation work for a month starting Wednesday in a bid to "stabilize the market."
China's biggest producer of light rare earths said in a filing to the Shanghai Stock Exchange that the move was aimed at "balancing supply and demand" after a period of falling rare earth prices.
Prices of some rare earth oxides have fallen sharply in recent months. Chinese prices of neodymium oxide have fallen 35% since June; praseodymium oxide has shed 17% and lanthanum oxide 21% in the period, data from Australian rare earth producer Lynas Corp. showed.
Baotou's move will likely influence price movements as the company accounts for 47% of global light rare earth output, data shared by the Royal Bank of Scotland showed.
A monthlong suspension would remove about 5,000 metric tons of output from the global market this year, RBS said.
"We would expect a monthlong shutdown from the largest producer in the world to impact prices reasonably quickly," said RBS rare earth analyst Sam Berridge. "Rare earth production is quite consolidated and the market is quite small, so one of the majors could influence the supply-demand balance quite easily."
Baotou has previously tried to influence prices of rare earths, a collective term for 17 metallic elements used in many important technological products including missile systems and hybrid cars.
Last month, the company said it would pay up to 900,000 yuan/ton ($141,000/ton) for praseodymium-neodymium oxide, at that time about 6% higher than market price, to "improve market order."
The purchases came a month after Beijing's renewed crackdown on illegal rare earth mining and production, which included confiscating unapproved stockpiles.
Baotou's latest move isn't likely to contribute to easing tensions with China's trading partners in strategic metals. The U.S. and Mexico have complained to the World Trade Organization on China's policies governing rare-earth output and exports.
China dominates the global market with about 95% of the world's output, but exercises considerably weaker control over its fragmented domestic producers.
Baotou isn't the first Chinese producer to suspend operations in an attempt to influence prices.
Companies in Jiangxi province and the Inner Mongolia Autonomous Region stopped mining in August as the government pursued its crackdown on illegal mining, participants at an industry forum said in August.
China's biggest producer of light rare earths said in a filing to the Shanghai Stock Exchange that the move was aimed at "balancing supply and demand" after a period of falling rare earth prices.
Prices of some rare earth oxides have fallen sharply in recent months. Chinese prices of neodymium oxide have fallen 35% since June; praseodymium oxide has shed 17% and lanthanum oxide 21% in the period, data from Australian rare earth producer Lynas Corp. showed.
Baotou's move will likely influence price movements as the company accounts for 47% of global light rare earth output, data shared by the Royal Bank of Scotland showed.
A monthlong suspension would remove about 5,000 metric tons of output from the global market this year, RBS said.
"We would expect a monthlong shutdown from the largest producer in the world to impact prices reasonably quickly," said RBS rare earth analyst Sam Berridge. "Rare earth production is quite consolidated and the market is quite small, so one of the majors could influence the supply-demand balance quite easily."
Baotou has previously tried to influence prices of rare earths, a collective term for 17 metallic elements used in many important technological products including missile systems and hybrid cars.
Last month, the company said it would pay up to 900,000 yuan/ton ($141,000/ton) for praseodymium-neodymium oxide, at that time about 6% higher than market price, to "improve market order."
The purchases came a month after Beijing's renewed crackdown on illegal rare earth mining and production, which included confiscating unapproved stockpiles.
Baotou's latest move isn't likely to contribute to easing tensions with China's trading partners in strategic metals. The U.S. and Mexico have complained to the World Trade Organization on China's policies governing rare-earth output and exports.
China dominates the global market with about 95% of the world's output, but exercises considerably weaker control over its fragmented domestic producers.
Baotou isn't the first Chinese producer to suspend operations in an attempt to influence prices.
Companies in Jiangxi province and the Inner Mongolia Autonomous Region stopped mining in August as the government pursued its crackdown on illegal mining, participants at an industry forum said in August.
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