China has seen a wave of price rises for rare earth recently on growing speculation that the State Reserve Bureau (SRB) will stockpile rare earth soon.



Rare earth producers have begun to hold back goods, strengthening expectations that the SRB will purchase rare earth soon. One large producer said the SRB may take action as soon as the end of November.



In November 2012, rare earth giants in north and south China suspended production and offering against falling rare earth prices . Inner Mongolia Baotou Steel Rare Earth (Group) Hi-Tech Co. halted production for two months. This was followed by Baotou Steel Rare Earth, China Minmetals Corporation and China Nonferrous Metal Industry's Foreign Engineering & Construction Co. (NFC) stockpiling rare earth. Subsequently, rumors began to circulate that the SRB will purchase rare earth.



It is now rumored that the SRB will buy tens of billions of rare earth, especially medium and heavy rare earth. There will be six bidders: Baotou Steel Rare Earth, China Minmetals Rare Earth Co., NFC, Chalco Rare Earth Co., Guangdong Rising Nonferrous Metals Group Co. and Ganzhou Rare Earth Group Co. All of the above six companies, except NFC, have begun to purchase medium and heavy rare earth.



Growing anticipation for SRB rare earth stockpiling fuelled an overall rally in rare earth prices. For example, prices for 14 out of 35 varieties of rare earth rose on November 11. Prices for praseodymium-neodymium oxide, in particular, jumped to 339,000-360,000 yuan per tonne from 334,000-355,000 yuan per tonne.