Heavy rare earth prices soared to new highs in June as China continued its clampdown on mining operations in the southern provinces.
Export prices for europium and dysprosium oxides more than tripled in three weeks and market sources expect further increases in the third quarter.
Heavy rare earth producers, largely based in the south-eastern province of Jiangxi, have been slowing production as the Chinese government carries out inspections to enforce environmental and safety standards.
The central government has come down hard on provincial authorities to make sure they are enforcing everything, forcing companies to slow down production, a major exporter of Chinese rare earths told IM when this issue went to press.
Prices will keep going up as, over the next couple of weeks, the government is really going to enforce the environmental practices it promised. They are visiting every factory, the source added.