In China, multipurpose use of rare earth resource, which are widely used in industry, is less than 50%. Meanwhile, the price of rare earth soars at more than US$15 million per ton, says Oriental Morning Post.
The soaring price of rare earth
As China tightens its rare earth exports, criticism continues from countries like Japan and America. And along with the government's moves to regulate the industry, prices of rare earth have skyrocketed recently.
The price growth of Northern China light rare earth is comparatively lower than the price of heavy rare earth in South China. The quoted price for lanthana, offered by Rare Earth Union in Baotou on the 4th of this month, was about US$26,226 per ton, and one ton of cerium oxide was US$33,940 dollars. The price rose by 6,170 to7,713 US dollars since April.
However, in his report released on June 13th, financial analyst Xue Feng from Citic Securities doubts that the rise in price is the result of government regulation and control, but rather is the result of the realization of rare earth's value.
He also worries that potential bubbles may exist, as traders and rare earth enterprises have been involved in stockpiling and speculation activities.
Potential harm to industrial chain
The current high prices have damaged the domestic rare earth industrial chain, said a senior leader of a leading rare earth smelting and separating enterprise in Ganzhou, home of rare earth resources in south China.
According to him, many traders have no desire to sell even at such high prices.
Reports from Economic Information Daily said yesterday that due to a tight supply of fluorescent powder many factories have shut down, and further issues would appear in the second half of this year.
Wang Caifeng, former assistant inspector for the Ministry of Industry and Information Technology, told media yesterday that many neodymium iron boron enterprises had complained of soaring rare earth prices at the National Rare Earth Meeting held in Beijing on June 13th.
Government moves to resist bubble
To avoid potential bubbles and further regulate the industry, a rare earth association and a giant company are on the way, said the Ministry of Industry and Information Technology at the rare earth meeting.
The moves are targeted at long-existing troubles in the industry, including illegal mining, chaotic exporting and low levels of resource utilization.
According to guidelines made by the State Council this year, China is now trying to restructure its rare earth industry, with focus on encouraging the forming of large companies as the leading forces. The plan also states that 80% of production capacity would be concentrated in three leading companies of the ionic rare earth industry in South China.
