Results not very favorable
After the two Chinese rare earth producing giants imposed their temporary suspensions of production, the market did not pick up as they expected.
In a week's time, 23 kinds of rare earth elements dropped an average of 2.97%, according to a rare earth-related web portal. Among them, eight suffered a plunge of over 4.6%, and lanthanum oxide even declined more than 9%.
Zhang Rihui, deputy general manager and board secretary of the Inner Mongolia Baotou Steel Rare Earth (Group) Hi-Tech Co., did not dodge questions when he was asked about the decision. He said the decision was made mainly due to the exhausted output quota, and it may solve the imbalance between tepid demand and oversupply.
Zhang revealed that the government has asked the company to stockpile rare earth deposits, for the good of the whole industry.
Foreign countries concerned with China's control
Rare earth elements are needed in essentially every area of high-tech production, be it for pharmaceuticals, military equipment, green energy technology, or information technologies.
China is said to control more than 95% of the global rare earth market, which makes its mining sector quite sensitive to sudden price drops.
Since 2008, rare earth prices have risen nearly twenty times, and it was reported prices increased only after the country started imposing export quotas for the precious materials.
The government said in a statement that it planned to strengthen monitoring and inspection in the coming months, saying that it would pay particular attention to punishing traders and processors that receive illegally-mined rare earth products, Reuters reported.
With the rising voices calling for exploring new minerals, many countries are now considering changing the traditional rare earth elements to new materials when making things such as digital products and equipment.
