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China rare earth producers post higher first-half profits despite tensions

China Rare Earth Resources and Technology reported a 46.5% year-on-year jump in first-half net profit to 237 million yuan, while China Northern Rare Earth forecast more than a doubling of earnings.

Reported · Written up by our desk · Mining

China’s rare earth producers reported or forecast strong first-half profits, as demand tied to the AI supply chain helped support prices even amid trade and geopolitical pressure, according to SCMP Economy. The outlet said Beijing’s use of strategically critical minerals as leverage in relations with Japan and the United States has not prevented normal operations for the sector.

Shenzhen-listed China Rare Earth Resources and Technology said its first-half net profit rose 46.5% year on year to 237 million yuan, or about US$35.1 million, based on an exchange filing on Friday. SCMP Economy noted the company’s price-to-earnings ratio was 636.9 in February and is about 254 now, still far above the market average.

Shanghai-listed China Northern Rare Earth (Group) High-Tech, described as China’s largest producer, saw its price-to-earnings ratio fall from 105.4 in February to about 58, SCMP Economy reported. The company expects first-half net profit of between 1.98 billion yuan and 2.06 billion yuan, implying year-on-year growth of 112.7% to 121.3%.

SCMP Economy attributed the price strength to growing hardware demand, citing an investment manager at Jianyuan Fund, Guo Lingyu, who said rare earth prices have continued rising on rapid AI supply chain expansion and surging needs for components.

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