“Prices of rare earths are now at low levels, so China definitely wants to build strategic reserves at this time,” a Shanghai-based metals analyst, who declined to be named, told AFP. “The other reason is that China hopes to control rare earth prices within a reasonable range, so as to encourage the long-term, healthy development of downstream industries.”
Rare earth prices are also rising as a number of environmental and regulatory checks hit the Chinese metals sector, Reuters reports. Consequently, rare earth prices in China is showing signs of bottoming out form the depressed price environment of 2012 through 2016.
However, with prices rising, China also has the ability to keep the increase in check as it is sitting on an unknown amount of stockpiled rare earth metals, which may be released into the markets. The country is a leader of green technology, such as solar panels, and it is in its own interest to keep rare earth prices lower.
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