China Rare Earth Stocks Rise on Crackdown Report: Shanghai MoverBloomberg News
Rising Nonferrous Metals Share Co. and Inner Mongolia Baotou Steel Rare-Earth Hi-Tech Co. led China’s rare earth stocks higher following a report the nation will curb illegal production of the metals.
Rising Nonferrous rose 4.1 percent to close at 48.70 yuan today in Shanghai, after climbing as much as 8.6 percent. Baotou Steel Rare Earth increased 0.7 percent to 29.46 yuan. The key Shanghai Composite Index rose 0.2 percent.
China will inspect 1,594 rare earth producers and traders nationwide as part of measures to halt illegal production, the Economic Information Daily reported, citing a government official it didn’t identify. The country, supplier of 90 percent of the world’s rare earths, has imposed export quotas since 1999 to help conserve resources and cut pollution.
The U.S., the European Union and Japan complained in March last year to the World Trade Organization about China’s limits on shipments of rare earths, a group of 17 chemically similar elements used in wind turbines and hybrid cars.
“The inspection is part of government efforts to crack down on illegal mining, fueling speculations that the move will drive up rare earth prices and benefit bigger companies,” said Li Xiaolu, a Shanghai-based analyst with Capital Securities Co.
The Ministry of Industry and Information Technology will create a ‘blacklist’ of companies found to have violated rules, the report said, without elaborating on the action the government plans to take. Three calls to the Ministry of Industry and Information Technology’s general office went unanswered.
China’s southern provinces produced at least 37,000 metric tons of so-called heavy rare earth minerals last year, more than double the 13,400 ton output quota set by the government, the Daily reported, citing the Association of China Rare Earth Industry.
China Minmetals Rare Earth Co. gained 0.7 percent to 26.04 yuan, while Aluminum Corp. of China Ltd., whose parent has rare-earth assets, increased 3.7 percent to HK$2.80 in Hong Kong trading.
To continue reading this article you must be a Bloomberg Professional Service Subscriber.
If you believe that you may have received this message in error please let us know.