Prices of rare earths in China have rebounded recently due to a halt in production and market expectations of large purchases for State Reserves, market analysts told the Global Times Tuesday.
Currently, the price of praseodymium neodymium oxide, a major rare-earth product, is about 32,000 yuan ($5,137) per ton, compared with 23,000 yuan at the end of October, a rise of nearly 40 percent, said Gong Xinghao, a rare-earth analyst with metal information portal smm.cn.
The recent price jump is mainly the result of a suspension of production, Zhang Anwen, deputy secretary-general of the Chinese Society of Rare Earths, told the Global Times Tuesday.
Rare-earth prices fluctuated wildly in 2011, jumping in June following government efforts to consolidate the sector but falling sharply in July as a result of oversupply and weakening market demand.
In an effort to curb the recent downward price trend, major producers have recently suspended production. Inner Mongolia Baotou Steel Rare Earth Hi-Tech Company, China's largest light rare-earth producer, reportedly suspended operations at its smelting and separation plants for one month starting October 23.
There has also been market speculation that the State Reserve will buy rare earths in December, which has boosted market prices, Gong of smm.cn told the Global Times Tuesday.
"As there has been uncertainty over the market demand, it is hard to say the current price is sustainable," Gong noted.
"We prefer to see stable prices instead of sharp rises and falls," said Zhang, noting that soaring prices have negative effects on downstream industries that use rare earths as raw materials, such as producers of flat-screen TVs, magnets and hybrid cars.
To conserve resources and protect the environment from heavily polluting rare-earth mining, China has curbed output and exports of rare earths since 2009. The export quota was set at 30,184 tons last year, and rose slightly to 30,996 tons for 2012.
Rare earths are a group of 17 elements that are used in new technologies like smartphones and hybrid cars.