Largest Rare Earth Producer Sees Sharp Profit Drop

Baotou Steel Rare-Earth (Group) Hi-Tech, the country's largest rare earth producer, announced in its financial results that it saw a sharp drop in its net profit and revenue in 2012 due to withering demand and a slowing economy.

The company's net profit declined 56 percent to 1.51 billion yuan ($240 million) last year compared with 2011.

Its revenue fell 19 percent to 9.24 billion yuan as a result of continuous low demand in the rare earth market and a drop in rare earth prices .

From raw material to functional products, the revenue has been down significantly, the company said.

The current price for primary rare earth products is 35 percent lower than in 2012. The company plans to reach revenue of 7.5 billion yuan in 2013.

Baotou Steel resumed production on Feb 23 after a four-month halt in production affected by the price slump.

Another major rare earth producer, China Minmetals Rare Earth Co Ltd, announced on March 26 its revenue was down 47 percent from 7.6 billion yuan in 2011 and its net profit has dropped 74 percent from 1.02 billion yuan in 2011.

Rare earths, which comprise 17 metallic elements, are used in many important technological products including missile systems and hybrid cars.

Export trade value has been on the decline as well. According to statistics from Baotou Customs, despite exports of rare earth increasing 3.3 percent to 3,021 metric tons in 2012, rare earth prices are down 76 percent to $26,000 per ton.


Rare Earth Manufacturer & Supplier: Chinatungsten Online - http://www.chinatungsten.com
Tel.: 86 592 5129696; Fax: 86 592 5129797
Email: sales@chinatungsten.com
Tungsten News & Tungsten Prices, 3G Version: http://3g.chinatungsten.com
Tungsten News & Tungsten Prices, WML Version: http://m.chinatungsten.com

Baotou Steel Rare-Earth Lowers Sales Target for 2013

According to the annual report of Inner Mongolia Baotou Steel Rare-Earth (Group) Hi-tech (hereinafter referred to as Baotou Steel Rare-Earth), the company’s profits declined nearly 57% YoY to RMB 1.51 billion in 2012, due largely to shrinking demand from slowing economy. The company lowered its sales target for this year by as much as nearly 20% out of growing pessimism over outlook for rare earth.     

Baotou Steel Rare-Earth reported RMB 9.24 billion in operating revenues last year, down 19.83%, and RMB 1.51 billion in net profits, also down 56.58%. Earnings per share were a mere RMB 0.624, markedly down from RMB 1.436 in 2011.  

The company explained that rare earth market was depressing throughout 2012, accompanied by falling prices. Sales of rare earth metals slumped due to poor orders from magnetic material producers, resulting in a 47.18% decline in the company’s operating revenues in this segment.  

The rare earth market has shown no signs of turning around. Prices for rare earth products slid 35% YoY in early 2013. Plagued by sluggish rare earth markets, Baotou Steel Rare-Earth, a leading rare earth producer, has set itself a target of achieving RMB 7.5 billion in sales revenues in 2013, down 18.85% from last year’s RMB 9.24 billon.  

The company says it will step up integration and restructuring of rare earth industry in Inner Mongolia. Besides, it will vigorously push ahead with alliance of producers in Gansu, Sichuan and Shandong to pave way for its establishment of China North Rare Earth Group.


Rare Earth Manufacturer & Supplier: Chinatungsten Online - http://www.chinatungsten.com
Tel.: 86 592 5129696; Fax: 86 592 5129797
Email: sales@chinatungsten.com
Tungsten News & Tungsten Prices, 3G Version: http://3g.chinatungsten.com
Tungsten News & Tungsten Prices, WML Version: http://m.chinatungsten.com

MLR: Standards on Minerals of Strategic Importance Including Rare Earth to Be Formulated in 2013

The Ministry of Land and Resources (MLR) held a press conference titled “Reserves of Petroleum, Natural Gas and Major Solid Mineral Resources in China during 2012” on March 27. According to the press conference, standards on mining recovery rate, mining dilution rate and dressing recovery rate in mineral resources of strategic importance including iron ore, copper ore, lead ore, zinc ore, rare earth and sylvite will be formulated this year.

According to Xu Dachun, Deputy Head of Mineral Resources Reserve Department of MLR, its department will establish databases on comprehensive utilization of mineral resources across China, complete surveys and assessment of mining recovery rate, mining dilution rate and dressing recovery rate of key mineral resources, and release reports on comprehensive utilization of mineral resources on a yearly basis. China’s first resource saving and comprehensive utilization evaluation indicator system will be released, which will be used as standards for evaluation of resource saving.  

China will vigorously popularize advanced and applicable technology so as to facilitate exploitation of mines.

Mr. Xu added that its department will strictly collect mineral resource compensation fees based on mining recovery rate so as to promote rational exploitation of mineral resources.


Rare Earth Manufacturer & Supplier: Chinatungsten Online - http://www.chinatungsten.com
Tel.: 86 592 5129696; Fax: 86 592 5129797
Email: sales@chinatungsten.com
Tungsten News & Tungsten Prices, 3G Version: http://3g.chinatungsten.com
Tungsten News & Tungsten Prices, WML Version: http://m.chinatungsten.com

Rare Earth Exports Triple in February, Demand Remains Sluggish

China's rare earth exports soared in February. According to China Customs, China exported 1,106 mt of rare earth in February, up 289.12% YoY. Market players believe that does not mean overseas demand improves.

After rare earth prices climbed to a high in August 2011, China's rare earth exports had been falling for several consecutive months. China's rare earth exports in 2012 were below 2011 levels, and nearly half of export quotas was vacant. Rare earth exports account for 1/3 of domestic rare earth output, and shrinking overseas demand will negatively affect the rare earth market. But rare earth exports tripled in February after rare earth prices rose to early 2011 levels. Is that because overseas demand improves?

But Gao Yuxin, a rare earth analyst from Ruidow, reported demand for rare earth was still sluggish, and transactions were muted.

                   rare-earth

Shanghai Heli Rare Earth Material Company engages in rare earth import and export business. According to Manager Yuan, the export data does not mean real demand grows, and rare earth international trade is still sluggish. Most China's rare earth exports were made to Japan. According to a professor from Hirosaki University, Japan reduced rare earth imports two years ago due to high prices, and produced with raw material inventories. There were also large amounts of rare earth smuggled into Japan, with prices very low, which is excluded in regular statistics.

Domestic market was also sluggish. Some rare earth users now began to purchase rare earth but modestly with existing prices.

Demand for rare earth was sluggish due mainly to China's weak rare earth downstream user industries. Half of rare earth is used in new materials, while only Zhongke Sanhuan, Advanced Technology & Materials Company and Ningbo Yunsheng produce rare earth permanent magnetic product. Many China's rare earth permanent magnetic product producers posted losses in 2012. Once overseas market weakened, rare earth industry will be impacted.

Demand for rare earth is now extremely weak. One rare earth trader said they only hope rare earth prices do not fall further. Neodymium oxide prices have fallen from RMB 1.4 million/mt in August 2011, to RMB 400,000/mt in March.


Rare Earth Manufacturer & Supplier: Chinatungsten Online - http://www.chinatungsten.com
Tel.: 86 592 5129696; Fax: 86 592 5129797
Email: sales@chinatungsten.com
Tungsten News & Tungsten Prices, 3G Version: http://3g.chinatungsten.com
Tungsten News & Tungsten Prices, WML Version: http://m.chinatungsten.com

China Expected to Push New Rare Earth Regulations

The rare earth case against China launched by the WTO will be decided by the end of the year. Market players believe China will have little chance to win the case, and predict China's management system to the rare earth industry will change, with new rare earth regulations expected to be released.

According to market analyst Chen Jiazuo, China's rare earth industry should put emphasis on local utilization of rare earth and rare earth functional material. He said, rare earth market players generally lack confidence for China to win the WTO rare earth case, and that will cause China to change its management system. Existing management measures including quotas, taxes and qualifications will likely be eliminated, and new regulations will be released.
  
China will likely accelerate construction of rare earth groups, so that China's rare earth business can run in a way of marketization.


Rare Earth Manufacturer & Supplier: Chinatungsten Online - http://www.chinatungsten.com
Tel.: 86 592 5129696; Fax: 86 592 5129797
Email: sales@chinatungsten.com
Tungsten News & Tungsten Prices, 3G Version: http://3g.chinatungsten.com
Tungsten News & Tungsten Prices, WML Version: http://m.chinatungsten.com

 

WeChat