Shares of US rare earths producer Molycorp Inc. plummeted 13% on Wednesday, trading for as low as $24.52 per share, after analyst JP Morgan slashed its price target on the stock to $39 from $57.

This, after China two days ago came out with its official quota of rare earths exports for the first half of 2012, pegged at 10,546 tonnes, a 27 per cent reduction from the quota set for the first half of 2011.

Prices of rare earth stocks have actually fallen since China said it will maintain its rare earths exports at status quo next year. Analysts and experts earlier hoped China, the world's stronghold of rare earth elements as it feeds more than 95 per cent of global demand, will further slash exports enough to trigger a rise rare earth prices.

JP Morgan said prices could possibly remain low next year given China's pronouncement and expected higher production from Molycorp Inc. and other rare earth producers.

Molycorp Inc. has fallen 51 per cent this year.

Beijing said eleven companies will share the Chinese quotas, including seven rare earth producers and four distribution companies. The first batch of quotas includes 9,095 tonnes of light rare earths and 1,451 tonnes of heavy rare earths.

The first-round quotas account for 80 per cent of the full-year volume for 2012, China's Ministry of Commerce (MOFCOM).

Molycorp, Inc. is the only rare earth oxide producer in the Western hemisphere. It owns and operates the world's largest, most fully developed rare earth mine and oxide manufacturing facility outside of China, located in Mountain Pass, California.

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China Sets Rare Earths Export Quota for 1st Half of 2012