(Yicai) July 11 -- Shares of China Northern Rare Earth Group High-Tech and Baotou Steel Union, two units of state-owned Baogang Group, soared by their 10 percent daily trading limit after the country’s largest supplier of critical minerals raised the price the steelmaker will pay for ore containing rare earth oxides.

Northern Rare Earth [SHA: 600111] closed at CNY29.71 (USD4.14) a share in Shanghai today, while Baotou Steel [SHA: 600010] ended at CNY2.09 (29 US cents).

The price Baotou Steel will pay for concentrates containing 50 percent rare earth oxides will increase 1.5 percent to CNY19,109 (USD2,666) per ton this month from last month, the two sister companies announced separately late yesterday. For every 1 percent increase in REO content, the price will rise by CNY382.18 (USD53) per ton.

Northern Rare Earth has now raised the price for four consecutive quarters, hiking it 14 percent from CNY16,741 in the third quarter of last year. Under a pricing mechanism introduced in 2023, Baogang’s subsidiaries set new prices in the first month of each quarter based on average market prices for the previous quarter.

The supply of rare earth raw materials tightened in China earlier this year, while demand -- supported by government policies -- remained strong, improving market conditions compared with last year, Baotou-based Northern Rare Earth told investors at a recent event.

Northern Rare Earth expects a major uptick in earnings. First-half net profit was likely between CNY900 million and CNY960 million (USD126 million and USD134 million) for the second quarter, nearly 20 times higher than a year earlier, according to its latest financial projection.

China’s rare earths industry has reached an inflection point, Citic Securities said in a recent research report. In the short term, electric vehicles, consumer electronics, inverter air conditioners, and wind‑power equipment will sustain high demand, while longer‑term growth may come from robotics, electric vertical take-off and landing aircraft, and industrial motors, it said.

Editor: Emmi Laine