(Yicai Global) Jan. 10 -- A subsidiary of Baotou Iron and Steel Group has raised the prices it charges another unit of the Chinese state-owned firm for rare earth concentrates by about 65 percent, attributing the increase to changes in supply and demand.

Baotou Steel Union will now sell concentrates containing 51 percent of rare earth oxides to China Northern Rare Earth Group High-Tech for CNY26,887.20 (USD4,219) per ton, compared with CNY16,269 a ton last year, the Baotou-based companies said in separate statements recently.

The supply of concentrates to China Northern Rare Earth, a major supplier of light rare earth elements, is an important part of Baotou Steel Union's comprehensive allocation of tailings and business performance, it said. To adjust to market conditions, the pair will start negotiating prices on a quarterly basis.

The affiliates also shared other details. If the content of rare earth oxides changes by 1 percentage point in the concentrate, the price will rise or fall by CNY527.20 (USD83) a ton. If converted into concentrate with 50 percent of rare earth oxides, this year's volume should rise to no more than 230,000 tons, as much as 28 percent more than last year.

Baotou Iron and Steel owns more than 37 percent of China Northern Rare Earth. The latter had a nearly 0.6 percent stake in Baotou Steel Union as of Sept. 30, according to corporate data platform Tianyancha.

Shares of Baotou Steel Union [SHA: 600010] climbed 1.4 percent today to close at CNY2.83 (40 US cents) apiece, while China Northern Rare Earth [SHA: 600111] ended little changed at CNY41.95 (USD6.60), a decline of 0.1 percent.

Editor: Emmi Laine, Xiao Yi