Rare Earths Shakedown

 News today that Baotou Steel Rare Earth Group will "suspend production" of rare earths for a month . . . to stabilize falling prices.  (see  Chuin-wei Yap's article in the Wall Street Journal at  http://online.wsj.com/article/SB10001424052970203897404578076030548046800.html) 

This doesn't sound like a price-driven decision . . . the price of rare earths has gone up 10 times since 2009 . . . this is more like a shakedown of the global IT industry.

Of course, between 2009 and today, there has been an enormous price bubble in rare earths - hugely inflated solely by China's September 2010 "embargo" on Japan (and everyone else).   Now that there are prospects for other non-China rare earths sources on the distant horizon, price pressures were easing, China is now seeking to inflate them again by "suspending" Baotou.

So, if one posits that, surely, Baotou was far less profitable BEFORE 2009 than now, the fact that rare earths prices are just ten times more expensive - rather than 50 times - one can assume that archetypal state mercantilism (as opposed to mercantilism for the profit of private entrepreneurs) is back on the march in China, eh?