A leading supplier of metallurgical consumables to the iron, steel and aluminium industries.
Baosteel, China's largest rare earth producer has announced that it was suspending smelting and separation work for a month in an attempt to counter recent falls in rare earth prices.
Baotou Steel Rare-Earth (Group) Hi-Tech, based in Inner Mongolia, produces nearly half of the world's light rare earth production, and consequently have a major influence on the supply and demand balance.
Rare earths which comprise 17 metallic elements are used in many important technological products including missile systems and hybrid cars, but it is also an important addition and constituent in foundry alloy additions such as Ferro Silicon Magnesium. Since 2009, prices have soared with a parabolic price rise in early 2011 followed by recent sharp falls in some rare earth oxides such as neodymium oxide, praseodymium oxide and lanthanum oxide.
The news follows on from China's August 2011 announcement of an environmental crackdown on illegal rare earth mining and production, and the latest in a series of tax rises, with the introduction of a regional resources tax in October 2011.
Baotou's move can only increase tensions, already strained with other countries reliant on China for rare earth metals. However, on an optimisitc note, 2011 is the first year for some time that China's rare earth export quotas have not been reduced, including a drastic cut of 40% in 2010.
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