Ever since beginning of 2011 chaotic price has been a hot topic in rare earth related conferences. In the last 20 years rare earth materials from China suffered from low price and one of the main reasons is that we do not have a collective negotiation mechanism, as a result of which, rare earth suppliers conflict with each other and their price was squeezed to extremely low level by the market.

Actually, northern China’s rare earth industry, headed by Inner Mongolia Baotou Steel Rare-Earth (Group) Hi-Tech Co Ltd, has established unified price because rare earth resources in northern China are highly concentrated. In southern China, rare earth resources scattered around different provinces while each province takes similar share and prices from different areas differs a lot. What’s more, large amount of rare earth from non-official channel aggravated this situation. Sometimes price difference could be up to 50%, which makes it impossible judge if a price is reasonable or not.

For the time being there is no conflict among rare earth suppliers because the price is at high level but the peace will surely be broken when price falls. Therefore, rare earth suppliers expect to set up a stable pricing mechanism to avoid price chaos in the future. On Sep 20 2011 preliminary meeting of China Rare Earth Industry Association was held and it is estimated that this association can be established at the end of 2011. By then,the price alliance of southern China rare earth industry can be put to work.