* Will introduce largest price increase ever in June
* Expects strong profits for next few quarters
* Considered listings on other exchanges, but not priority
* Shares down 4.48 pct at C$8.32 on TSX
By Julie Gordon
TORONTO, March 11 The price of rare earth
oxides will continue to rise as Chinese producers demand more
money for concentrate and speculators stockpile metals, the
head of Neo Material Technologies NEM.TO said on Friday.
"Since the Chinese new year holidays, we've seen an
unprecedented increase in rare earth prices in the domestic
Chinese market," Chief Executive Constantine Karayannopoulos
said on a conference call with analysts.
"We suspect there will be a few more months of this pricing
environment before things stabilize and possibly reverse."
The cost increases are being driven by miners "aggressively
increasing concentrate prices", by speculators hoarding oxides,
and by producers holding on to rare earth products in
anticipation of even higher prices, said Karayannopoulos.
Neo Material is one of the few Western companies producing
rare earth oxides, rare earth magnets and magnetic powders. The
company operates in China, Thailand and North America.
Rare earths are increasingly in demand as China, which has
a near monopoly on global supply, clamps down on exports of the
key metals used in technology items like smartphones.
Karayannopoulos said the Toronto-based company would
introduce its "biggest ever" price increases in June in
response to the higher costs.
He noted that he does not expect Chinese export quotas to
change materially in the second half of 2011.
"We're in an environment where prices are going up daily
and sometimes hourly," said Karayannopoulos. "In this
environment you've got to sit back, take a deep breath and just
wait for reason to return."
Neo Material reported a higher fourth-quarter profit on
Thursday, as rising demand and prices for rare earth materials
boosted revenue for both its magnetic products and materials
In response to a question about listing in New York,
Karayannopoulos said that while the company had considered a
secondary listing on various exchanges, it was not a priority.
He also noted that he had not yet heard of any issues from
Japanese customers over the 8.9 magnitude earthquake that
struck on Friday.
Neo Material Shares were down 4.48 percent on Friday at
C$8.32 on the Toronto Stock Exchange.
(Reporting by Julie Gordon; editing by Rob Wilson)