SHANGHAI, May 16 (SMM) – The latest round of rise in rare earth prices in China has been fueled mainly by commercial stockpiles of the strategic resource.
Is there room for more gains? China Business Radio tells you the answer by interviewing Chen Li, Metal Energy Mineral Chief Analyst at Huatai Securities Research Institute.
There is a good chance for rare earth prices to rise further for the foreseeable future, Chen predicted. Besides commercial stockpiles, crackdowns on illegal rare earth mining in north China also contributed to the price rise, Chen explained.
The policy side is also favorable. The MLR released the 13th Five Year Plan for Land & Resources this April, which explicitly urged for protection of important minerals, especially rare earth. The MIIT sought public opinions on Regulations for Standardization of Rare Earth Industry, which emphasized that minerals must be exploited in strict accordance with mining quotas.
Many rare earth companies are unlikely to resume production at current price level. Only when orders grow significantly and profit is secured will idled producers reopen, Chen predicted.
Demand growth in traditional hard disc and consumer electronics sectors have began falling, but demand in energy-saving motor and new energy sectors are rising markedly, Chen added.
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