A decline in China's 2012 rare-earth exports was caused by smuggling, weak external economic conditions and relatively high prices, insiders told the Global Times Tuesday.

China's rare-earth exports last year reached 16,265 tons, a drop of 3.5 percent compared to the year before, according to statistics released Tuesday by Hong Kong-based China Customs Statistics Information Service Center.

The 2012 rare-earth export volume accounted for just 53 percent of the total quota of 30,966 tons. And the total export value also fell by 66 percent year-on-year to $906 million, said the center.

"Rare-earth smuggling is one reason why exports were lower," an industry insider told the Global Times on Tuesday on condition of anonymity.

He also noted that the smuggling situation is difficult to regulate, as smugglers use different product names to send rare earths out of the country.

In 2011, the amount of rare earths smuggled out of China was 1.2 times the amount of rare earths legally exported, Ma Rongzhang, secretary-general of the China Rare-Earth Industry Association, was quoted as saying in a report by Xinhua News Agency in August last year.

The insider echoed Ma's point, adding that he thinks the amount of smuggled rare earths could have risen to more than 10,000 tons in 2012.

Du Shuaibing, an analyst at Beijing-based industry research agency Baiinfo, told the Global Times that the country's ongoing industry consolidation may help deter smuggling, because when production is controlled by a smaller number of large companies, the authorities will be better able to monitor the industry.

"Another reason for the decline in exports is the weak market demand," said the insider.