Tags: Rare | Earth | Metals | Prices

NY Times: Rare-Earth Metals Prices Fall Back to Reality

Wednesday, 16 Nov 2011 01:00 PM

Rare earth prices have been soaring for nearly three years. But now the market reportedly is experiencing a rapid downward turn - and the prices are falling back to earth.

The metals are used for a range of industrial purposes, such as refining oil and manufacturing batteries and wind turbines.

China has about 95 percent of the global supply and it controls the market through export quotas that limit the amount of rare earths sold to other nations. These limits are believed to be a primary factor in the soaring prices seen in the past.

However, the New York Times reports that international prices for some of the metals have fallen by two-thirds since August and are still dropping.

Reasons reported by executives include big companies in the United States, Europe and Japan moving operations to China, drawing down inventories, switching to alternative materials or even curtailing production to avoid paying extremely high prices, the Times reports.

The Chinese appear to be taking countermeasures to protect the market, which include halting production.

In October, Reuters reported that Baotou Rare Earth, China's top rare earths producer, announced a suspension of its smelting and separation operations for one month.

A filing to the Shanghai Stock Exchange reportedly noted that the move was aimed at supporting Beijing's efforts to preserve rare earth resources and end a sustained decline in prices.

Also, the New York Times reports that the Commerce Ministry has blocked companies from exporting at prices that it deems too low.

There are predictions that export quotas will be stricter in 2012, which may lead to pricing recovery.

“You’re going to see the market turn back much more like we saw at the first part of 2011,” said Mark Smith, CEO of Molycorp, to Business Week.

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Rare earth prices have been soaring for nearly three years. But now the market reportedly is experiencing a rapid downward turn - and the prices are falling back to earth. The metals are used for a range of industrial purposes, such as refining oil and manufacturing...
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2011-00-16
Wednesday, 16 Nov 2011 01:00 PM
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