China's Shenghe Lifts Offer for Australia's Peak Rare Earths After Market Rally

Shenghe Resources expects to post an attributable profit of between 305 million yuan and 385 million yuan in the first half, rebounding from a loss of 68.5 million yuan in the year-ago period, according to a Tuesday filing with the Shanghai bourse.

The rare earth company's upbeat forecast is attributable to higher sales volume of major products, as well as optimized marketing and production, the filing said.

Shenghe Resources Holding said its US partner, MP Materials, has temporarily suspended exports of rare earth concentrate to China.

The decision comes in response to the recently imposed 125% tariffs by the White House on certain Chinese imports, according to a Shanghai Stock Exchange filing on Monday.

Shenghe Resources (Singapore) International Trading, a subsidiary of the Chinese firm, has been the exclusive distribution partner for MP Materials since January 2024. The two companies entered into a two-year agreement with an option to extend for an additional year.

The Chinese rare earth company said MP's suspension will not have a significant impact on its production and operations as it has an alternative supply source for rare earth raw materials, including domestic sources in Sichuan, monazite, and imported ores from other countries.

Shenghe Resources Holding expects to log a net profit attributable to the parent of between 190 million yuan and 260 million yuan in 2024, dropping to 22% to 43% from the previous year

The attributable profit in 2023 was 332.7 million yuan or 0.1898 yuan per share.

The rare earth company attributed the forecast to a significant drop in the average sales price and gross profit margin of the company's main products amid lagging changes in market costs.