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Samson Luong

Rare-earth prices rise on slowed production - 2 views

www.globaltimes.cn/...744158.shtml

commodities and resources rare earth production supply demand Samson Zhang

shared by Samson Luong on 26 Nov 12 - No Cached
  • Prices of rare earths in China have rebounded recently due to a halt in production and market expectations of large purchases for State Reserves
  • 32,000 yuan ($5,137) per ton, compared with 23,000 yuan at the end of October, a rise of nearly 40 percent
  • The recent price jump is mainly the result of a suspension of production
  • ...4 more annotations...
  • Rare-earth prices fluctuated wildly in 2011, jumping in June following government efforts to consolidate the sector but falling sharply in July as a result of oversupply and weakening market demand. 
  • There has also been market speculation that the State Reserve will buy rare earths in December, which has boosted market prices
  • soaring prices have negative effects on downstream industries that use rare earths as raw materials
  • To conserve resources and protect the environment from heavily polluting rare-earth mining, China has curbed output and exports of rare earths
  • Samson Luong on 26 Nov 12
     
    1. Can you use the economic concepts to explain what is happening in the rare earth market? (Hint: Supply and Demand determinants, the relationship of supply and demand etc. Feel free to use other concepts.) 2. Can you explain what type of interventions the government is using to solve the negative externalities in this case. What may happen in the market as a result?
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