China's top rare earths miner halts some operations
A worker shovels rare earth tailings from the gutter below a transit pipe in Baotou
Baotou Steel Rare-Earth Hi-Tech Co, China's top rare earths producer, will halt some of its smelting and separation operations for a month in an effort to stabilise slumping prices, it said.
China accounts for the great majority of the world's rare earth supply.
Domestic prices of the group of 17 metals, which are used in products ranging from smartphones and wind turbines to hybrid cars, have tumbled by around 50 per cent since the start of the year as a global slowdown hits demand.
"Demand for rare earths has weakened in the second half on the back of the economic slowdown, causing a sustained fall in prices," inner Mongolia-based Baotou said in a filing to the Shanghai Stock Exchange.
China's economy slowed for a seventh straight quarter in July-September, growing just 7.4 per cent, its weakest showing since the depths of the global financial crisis, as a result of weak demand at home and abroad.
"To stabilise the market and balance supply and demand, Baotou will halt its smelting and separation of some units from 23 October," it said.
Baotou, which saw its third quarter net profits drop nearly 90 per cent on year to 120 million yuan ($19.19m), will also halt raw supplies to other smelters and separation companies for a month.
It is not the company's first attempt to stem the decline in rare earth prices. It suspended facilities for a month last year and announced plans to buy an unspecified volume of praseodymium-neodymium oxide at above market prices.
Prices of rare earths soared last year by hundreds of per cent after China clamped down on exports, drawing the anger of trade partners who said the curbs were unfair.
Hot money flowed into an illiquid sector but later departed, contributing to the drop.
Meanwhile, the higher prices persuaded countries such as the US, Canada and India to resume production after shutting mines decades ago.
In August, China announced new export quotas on rare earth elements (REE), which increased the yearly figure by 2.7 per cent.
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