(Bloomberg) -- China has summoned automakers along with producers of electronics and magnet materials in a bid to bring surging rare earths prices under control, according to people with knowledge of the matter.
Delegates from the China Electronics Material Industry Association and maunfacturers including BYD Co., SAIC Motor Corp., Jing-Jin Electric Technologies Co. attended a meeting arranged by the Ministry of Industry and Information Technology on Wednesday, the association’s magnet branch said in a statement, without elaborating.
The people with knowledge of the meeting’s discussions declined to be named because the information isn’t public. The ministry didn’t immediately respond to a fax seeking comments.
The meeting was ordered after prices of rare earths, a complex containing 17 elements that are used in everything from electric vehicles to smartphones, surged as demand outpaced supply. A power shortage exacerbated disruptions and a broad commodity rally has increased production costs.
Soaring rare-earth prices are boosting costs at manufacturers including automakers as the country grapples with the fastest inflation in over two decades. Neodymium and praseodymium -- two elements used in permanent magnets for cars and electric motors -- have jumped to the highest in more than a decade.
In another meeting earlier this month, the industry regulator and association officials urged raw-material companies in the electric vehicle supply chain to absorb some of the cost increases instead of passing them on to avoid undermining EV development.
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China is a dominant producer of rare earths, accounting for 70% of global production, and exports rose to a record last year. The country is consolidating the sector by merging key producers to strengthen its control over a global industry it has dominated for decades.
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