In February 2013, China's rare earth exports 1106 tons, greatly increased 289.12% on last year, while in the same time, the rare earth prices have seen a sharp fell comparably. Some experts believe that the significant increase in the exports of rare earth is owing to the low base of last year same period. It is showed from the statistics that rare earth prices in February amounts to $22,650/ton, down 11.32% with last month of $25,540/ton .

Generally speaking, the rare earth companies have filled in its inventory in advance, in order to better prepare its peak selling season in March. It has been informed that, Baotou Steel Rare Earth, which has discontinued its production for four consecutive months, has announced its resume of production, while at the same time, the company has began to use the materials form domestic companies in North China.

GF Securities analyst Guoxian Ju said, With the peak production season in March and April, the rare earth concentrate prices has been stable for almost 2 months. However, the slightly decrease in the price of midstream smelting products has showed the demand is still under depression.


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According to the website of the Environmental Protection Office, 80 rare earth producers in China meet environmental protection requirements, and passed inspections by the Environmental Protection Office. 5 of them are located in Baotou.

These five enterprises include Baotou Xinyuan Rare Earth Hi-Tech and New Material Company, Baotou Luodiya Rare Earth Company, Baotou Tianjiao Seimi Polishing Powder Company, Baotou Rewin Rare Earth Metal Materials Company and Baotou Santoku Battery Company.

After the inspections, environmental protection equipment standard and management ability of enterprises will improve.


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It is a good period for the depressing rare earth industry to conduct industrial upgrading officially. Ministry of Finance, Ministry of Industry and Information Technology have jointly issued the "Special Funds Management for Rare Earth Industry Upgrade", which will support "R&D of Technology and Standards", "R&D of Technical Application and Industrialization", "Development of Technical Platform". The measures have incorporated a number of subsidy financing and capital injection to support the rare earth technology development and industrialization.

The special funds will be utilized for the following five perspectives: Rare Earth Resource Extraction Supervision; Rare Earth Mining, Smelting Environmental Technological Innovation; R&D of Rare Earth Key Technologies and Standards; Technology Development and Industrialization of High-end Applications of Rare Earth; Construction of Public Technical Services Platform.


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China’s largest rare earths producer, Inner Mongolia Baotou Steel Rare-Earth (Group) Hi-Tech Co Ltd.(Baotou Steel Rare-Earth), saw a year-on-year decline of 56.58 percent in net profit last year. Moreover, Baotou Steel Rare-Earth plans to achieve 2013 with annual sales revenue totaled RMB 7.5 billion Yuan, down 18.85% compared to 2012, according to the company’s 2012 annual report released on Friday, March 29, 2013.
 
The company’s net profits amounted to RMB 1.51 billion Yuan, while operating revenue decreased 19.83 percent year on year to RMB 9.242 billion Yuan in 2012, earnings per share came in at 0.624 Yuan, in 2011, its net profits reached RMB 3.48 billion Yuan as well as per share reached 2.87 Yuan in 2011, according to its annual report filed with the Shanghai Stock Exchange.
 
“Rare earth market still remains in the doldrums in 2012, the rapidly falling prices of its rare earth-related products and a sharp drop in demand led to the profit and revenue declines. Moreover, the costs of raw materials have increased over the last year, which have increased production costs and push profit margins down”, the company explained.

                  
 
In fact, the company said that it earned a net profit of RMB 1.689 billion Yuan in the first nine months of last fiscal year, which means Baotou Steel Rare-Earth where as it recorded a net profit loss of RMB 1.79 billion Yuan during the fourth quarter due to the company had suspended rare earth production since October 23, 2012.
 
In addition, the annual report also noted that, under the central government’s plan, only one rare earth upstream enterprise was to be permitted in Baotou. Baotou Steel Rare-Earth has signed an integration agreement with 12 other rare earth producers in the region last year. The company plans to speed up its rare earth monopolization in the Inner Mongolia autonomous region. Moreover, will continue to strengthen communication with Sichuan, Shandong, Gansu (Province), promoting to set up the “China Northern Rare Earth Group”, while led to the creation of the industry’s first ever “mega-company” this year.
 
At present, almost all China’s enterprises are facing the problem of insufficient demand; the relatively sluggish domestic and overseas consumption market has slowed down the demand for rare earth oxides from the electronics, automobile and other industries. Moreover, the contracted demand from Japan and the US, the world’s second and third largest rare earth consumers respectively also will directly hit the domestic rare earth enterprises. Therefore, expects that the external environment will continue to affect the downstream demand for rare earths as well as the price of rare earth oxides will not make substantial improvement in the short term.”


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