China Southern Rare Earth Alliance proposed its members to suspend production in all rare earth mining enterprises, smelting separation enterprises and comprehensive recycling enterprises for one month starting from October, China Securities Journal learnt from Ganzhou Rare Earth Mining Industry Group on September 28.
Ganzhou Rare Earth Mining Industry said that the move is taken to promote the sustained and healthy development of China's rare earth industry, consolidate achievement made in crackdowns on illegal actions in the rare earth industry and further deepen the supply-side reform of the rare earth industry.
Rising Nonferrous Metals Share Co., Ltd. (000259.SZ) announced on September 26 evening that according to the company's annual maintenance plan, to ensure safe, stable and effective operation of production equipment in its rear earth metallurgy and separation enterprises and to improve safety and environmental protection production standards, the company decided to suspend production in its rear earth metallurgy and separation enterprises for overhaul. The overhaul will start from since October 1, 2017, and is expected to last for one month. When the production will resume will depend on the overhaul progress.
Du Shuaibing, rare earth analyst with information provider Baiinfo, told the China Securities Journal that if the China Southern Rare Earth Alliance’s proposal can receive support from its member enterprise and implement, it will be good news for the temporary oversupply in the market.
As the downstream demands for rare earth was weaken, the supply is bloated, which causes a continuous decline in rare earth prices. Statistics from Baiinfo shows that as of September 28, the price of praseodymium neodymium is 460,000 yuan per ton, down 19.5 percent from its previous high of 550,000 yuan per ton.
“NdFeB factories do not want the price of rare earth to fell. Downstream enterprises accepted the last round of price increases. But prices have declined now. It’s hard for them to explain to the downstream enterprises,” an employee responsible for procurement from an NdFeB factor told the China Securities Journal.
An industry insider said that the current oversupply is mainly due to the rapid rise in prices in early August. There are two main reasons. On the one hand, when prices rose rapidly in early August, NdFeB factories reserved large amount of inventory. But demands are weak now. On the other hand, when prices rose rapidly in early August, expectations are optimistic. Therefore, factories worked overtime to prepare inventory, which greatly increased inventories. Therefore, there is oversupply in the market in the short time. “Although there is an oversupply, it will be temporary. Downstream demand is not really weak. If the upstream restricts supply, the market will turn around by the end of October at the latest.”
(Translated by Coral Zhong)
Ganzhou Rare Earth Mining Industry said that the move is taken to promote the sustained and healthy development of China's rare earth industry, consolidate achievement made in crackdowns on illegal actions in the rare earth industry and further deepen the supply-side reform of the rare earth industry.
Rising Nonferrous Metals Share Co., Ltd. (000259.SZ) announced on September 26 evening that according to the company's annual maintenance plan, to ensure safe, stable and effective operation of production equipment in its rear earth metallurgy and separation enterprises and to improve safety and environmental protection production standards, the company decided to suspend production in its rear earth metallurgy and separation enterprises for overhaul. The overhaul will start from since October 1, 2017, and is expected to last for one month. When the production will resume will depend on the overhaul progress.
Du Shuaibing, rare earth analyst with information provider Baiinfo, told the China Securities Journal that if the China Southern Rare Earth Alliance’s proposal can receive support from its member enterprise and implement, it will be good news for the temporary oversupply in the market.
As the downstream demands for rare earth was weaken, the supply is bloated, which causes a continuous decline in rare earth prices. Statistics from Baiinfo shows that as of September 28, the price of praseodymium neodymium is 460,000 yuan per ton, down 19.5 percent from its previous high of 550,000 yuan per ton.
“NdFeB factories do not want the price of rare earth to fell. Downstream enterprises accepted the last round of price increases. But prices have declined now. It’s hard for them to explain to the downstream enterprises,” an employee responsible for procurement from an NdFeB factor told the China Securities Journal.
An industry insider said that the current oversupply is mainly due to the rapid rise in prices in early August. There are two main reasons. On the one hand, when prices rose rapidly in early August, NdFeB factories reserved large amount of inventory. But demands are weak now. On the other hand, when prices rose rapidly in early August, expectations are optimistic. Therefore, factories worked overtime to prepare inventory, which greatly increased inventories. Therefore, there is oversupply in the market in the short time. “Although there is an oversupply, it will be temporary. Downstream demand is not really weak. If the upstream restricts supply, the market will turn around by the end of October at the latest.”
(Translated by Coral Zhong)
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