China's exports of rare earth ores and downstream products have increased month after month this year, but many companies are struggling as prices and demand stay low and overseas supplies rise, said a senior official on Thursday.

China exported 2,196 metric tons of rare earth ore in April, up 600 percent year-on-year and 38 percent month-on-month, according to the latest data from the customs office.

A rare earth mine in Xichang, Sichuan province. China's rare earth ore production was 41,000 metric tons in the first half of the year, according to the Ministry of Industry and Information Technology.PROVIDED TO CHINA DAILY

"China's rare earth ore exports have been rebounding monthly since February,"said Ma Rongzhang, secretary-general of the China Rare Earth Industry Association.

But Ma and the association did not provide export figures for the first half.

Ma spoke during the Fifth China Baotou Rare Earth Industry Forum held in Baotou, Inner Mongolia.

"Some companies (mainly small ones) have stopped production (because of low prices),"he said.

Rare earths, a group of 17 elements, are essential in the manufacture of an array of high-tech products, including wind turbines and hybrid cars.

According to the Ministry of Industry and Information Technology, China's first-half rare earth ore production was 41,000 tons, accounting for 87 percent of the planned production.

China, which has 23 percent of the world's reserves of rare earths, accounts for more than 90 percent of the world's supply.

The United States and Japan are still the two biggest buyers of China's rare earth ores, even though overseas exploration and production are increasing, said Ma.

During the first five months of the year, US imports from China totaled about 4,000 tons, making it the top overseas buyer. Japan was second with imports of about 3,500 tons.

Weak global economic conditions hit China's rare earth exports last year, with shipments down 58 percent to 18,600 tons. That means as much as 40 percent of the export quotas for these substances weren't used, based on MIIT data.

Decreasing downsteam demand pushed down prices as well.

Total industry profits fell 32.1 percent last year to 10.8 billion yuan ($1.75 billion), according to the ministry.

Zhang Zhong, general manager of Baotou Steel Rare-Earth Hi-Tech Co Ltd, the country's largest rare earth producer, said soaring rare earth ore prices in past years upset the supply-demand balance of the market for a short period, but eventually the balance will return to a reasonable level.

He forecast that China's share of the global market will fall from the current 95 percent to 73 percent by the end of 2015, as overseas rare earth projects gradually reach full production.

"The changing global rare earth production structure will have a large impact on China's rare earth industry in the future,"he said.

"However, the rare earth industry will eventually focus on China because we have the geographic advantage,"said Zhang.

"Meanwhile, we should move more quickly to deal with illegal production and smuggling, which are the most urgent issues facing the domestic industry.”

China's illegal rare earth ore production reached about 40,000 tons in 2012, with downstream refined products of about 50,000 tons, said Chen Yanhai, head of MIIT's department of raw materials.

"The government has intercepted 14 rare earth smuggling cases in the past two years and closed 14 illegal rare earth mines,"he said.

On Wednesday, the ministry announced on its website that it was launching a three-month crackdown on illegal activity in the rare earth sector.

The campaign, to last from Aug 15 to Nov 15, aims to reduce illegal exploration, production and distribution of rare earth metals and regulate rare earth recycling companies.