Industry insiders told the Global Times that recently, among rare earth companies in Ganzhou, Jiangxi, about 40% to 50% of rare earth companies have stopped production to correct environmental problems, and most of these companies are in the middle and lower reaches of the industrial chain.
Ganzhou is the main production base of rare earths in China. Since the production suspension is expected to continue until the end of April, industry analysts predict that the shortage of rare earths, coupled with the logistics problems of Myanmar's delivery of rare earths, may further tighten China's exports of rare earth products in April and may push up their prices even higher.
The closure was carried out before the fourth ecological and environmental protection inspection team of the central government arrived in Jiangxi. The trip will take place from Wednesday to May 7. The team will investigate local environmental protection work. According to local industry insiders, nearly half of the rare earth producers in Ganzhou have ceased operations. Some people, such as Yang's company, closed down before the organization arrived to correct environmental problems. Industry insiders said that part of the reason for the sudden closure was 24/7 production, which resulted in "serious environmental impacts" such as the discharge of substandard sewage. "Since October, all rare earth producers in Ganzhou have been doing their best to take advantage of the increasing orders and make up for losses during the coronavirus outbreak. Most companies did not even take a break during the Spring Festival holiday, which exacerbated environmental problems. A manager of a state-owned rare earth company who asked not to be named told the Global Times on Thursday. The manager added that most of the suspension facilities are factories specializing in the separation of rare earth waste, which deal with rare earth oxides that may be the most environmentally polluting. Key procedures. He said: "We must comply with environmental protection rules in our daily work. Those who comply with strict environmental protection rules will still operate as usual. "
The manager of a Ganzhou state-owned rare earth company named Yang told the Global Times on Thursday: “One of our rare earth waste processing plants will cease production before the end of March.”The Global Times also learned from several major rare earth magnet manufacturers in Ganzhou that their production has not been affected. It is not clear when the factory will start buzzing again. Some industry insiders predict that they will resume work at the end of April when all environmental problems are resolved. According to local media reports, due to the shutdown of the plant, the monthly production of neodymium oxide can be reduced by 1,200 tons, which is the key rare earth oxide for the production of permanent rare earth magnets for sale.
Independent rare earth market observer Wu Chenhui told the Global Times on Thursday that the decline in the supply of rare earth oxides will have a "phased impact" that will push up prices in the short term. However, if production is suspended for more than a month, the pressure on global supply will also spread globally.
According to customs data, from January to February, China's rare earth exports increased by 28.8% year-on-year to 7,068 tons.