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[Ferro-Alloys.com] Many rare earth businesses have reduced or halted production in Guangdong due to sluggish market demand, according to industrial observers.
Rare earth production is in the doldrums in many Chinese provinces, including the southern province of Guangdong, which is a major rare earth producer in China.
A vice minister of the province's rare earth guild, said the surge in rare earth price exported from China in the first half of last year had prompted downstream industries to look for substitutes while stimulating overseas companies to restart rare earth production.
According to official statistics, China exported 5,000 tonnes of rare earth in the first half of 2012, with the annual exports expected at 10,000 tonnes, down from 16,000 tonnes last year.
A spokesman from Guangdong Rising Nonferrous Metals Group Co. Ltd, a leading rare earth producer, said the company's net profit declined by 90 percent year-on-year in the first half of 2012 due to drops in sales and prices.
"The company has to axe part of its capability due to waning demand of the downstream sector and the policy cap on the metal's output," the spokesman said.
Experts said the lull in rare earth production may continue, and that it may take a year for the price and demand to return to normal.
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