China's regulators are trying to cool down the price rally of rare earth, which has seen a sustained price increase since the beginning of this year, after five years of downturn.
The statement asks the six rare earth groups not to take the lead in raising prices, but it may still be hard to hold down the rising tendency, Zhan added.
The National Rare Earth Office issued a statement on Aug 8 to the six largest rare earth groups in China, including Aluminum Corporation of China Ltd and China North Rare Earth (Group) Hi-tech Co Ltd, asking them to help stabilize the rare earth market, according to industry insiders.
Part of the reason for the rapid rise in prices since June has been a lack of co-ordination in price settings and the stocking up of supplies in the rare earth market.
Another reason for the rising price from January to May is that China has eliminated capacity by closing many illegal factories, said Zhan Sheng, a nonferrous metals expert from JZ Investment.
The surging prices of rare earth products may harm the whole industry by squeezing downstream firms, Xu said.
In 2011, surging prices forced many small downstream companies out of the sector and led to a slump in the entire industry for more than five years.
www.ecns.cn/business/2017/08-10/268829.shtml
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