Rare earths at the port of Lianyungang, Jiangsu province, ready for export in 2009. Rare earth exports in China rose 55 percent from February to 1,718 metric tons in March. [China Daily]

Global demand for rare earth metals from China climbed in the first quarter due to falling prices despite domestic producers and processors reporting losses.

Statistics from the General Administration of Customs suggest that rare earth exports rose 55 percent in March from February to 1,718 metric tons.

Export volume in the first three months grew 47.3 percent to 3,916 tons. But in the same period, export value dropped 71 percent to $91.9 million.

Deputy Secretary-General of the China Rare Earths Industry Association Chen Zhanheng said the growth in exports volume stems from a price decline in 2011, stimulating overseas buyers who had used up their reserves. Chen said there are no signs of a quick rebound from falling demand at home and abroad, but he believes the market will grow as production is being regulated and prices continue to fall.

Chen Jiazuo, an analyst from the China Nonferrous Metals Information Network, said it only took two years for the industry to deteriorate from its peak, yet current prices are still higher than the lowest point in the past 10 years.

Only half of the export quota in 2012 was used due to the price surge in 2011, which deterred buyers. The value of exports in 2012 fell 66.1 percent year-on-year to $906 million.

Rare earths, which comprise 17 metallic elements, are used in many technological products, including missile systems.

China supplies more than 90 percent of the world's rare earths, and has nearly one-third of the known global reserves.

In the first quarter, Baotou Steel Rare-Earth (Group) Hi-Tech, the country's largest rare earth producer, reported revenue of 2.29 billion yuan ($366 million), down 35.7 percent from a year ago. Its net profit fell 79.7 percent to 245 million yuan. Its first quarter report said prices for its main products have dropped more than 50 percent.

Last year, the firm saw a sharp drop in net profit and revenue due to falling demand and a slowing economy.

Net profit dropped 56 percent to 1.51 billion yuan year-on-year, while revenue fell 19 percent to 9.24 billion yuan as a result of low demand in the rare earth market and a price drop.

Baotou Steel resumed production on Feb 23 after a four-month halt due to the price slump. Another producer, Rising Nonferrous Metals Co Ltd, saw a first quarter loss of 29 million yuan due to a drop in operating revenue and gross profit.

Last month, China Minmetals Rare Earth Co Ltd announced a 47 percent drop in revenue, from 7.6 billion yuan in 2011, with net profit falling 74 percent in 2011.

Many downstream enterprises are suffering due to the price surge in 2011, with some closing their operations, Chen said. Rising prices have forced many manufacturers to switch to other materials or seek new markets for rare earths, he said.

Int'l demand rises for China rare earths in Q1