BEIJING -- Prices of China's rare earth products dropped sharply over the past month as market demand remained weak amid the economic slowdown.

Data from Baichuan Information, a raw material information provider, showed that prices of several rare metals, including lanthanum oxide and praseodymium oxide, almost reached the year's lowest level in August despite a rebound starting in June.

The price of praseodymium-neodymium oxide, primarily used to make ceramics and magnetic materials, fell to around 360,000 yuan ($56,800) per ton in August, compared to the year's lowest of 340,000 yuan per ton in March, according to Baichuan Information.

The figure was also significantly down from the highest price level of 1.4 million yuan per ton recorded last year.

"Weak downstream demand is the major reason for the price slump," said Du Shuaibin, an analyst with Baichuan Information.

Du said the market demand for neodymium iron boron, another popular rare earth product known for its magnetic property, has also been quite low, causing many producers to suspend production as they suspected that prices could fall further.

Overcapacity has been attributed as another cause for declining prices. Data from Shanxi Magnetic Material Group, a leading industry group in NdFeB production based in north China, showed that capacity utilization rate for the NdFeB sector stood at 40 percent, indicating severe excess production.

Industrial production has been faltering in China due to sapping external markets and authorities' hesitance to issue stimulus policies for fear of stoking inflation.

China produces more than 90 percent of the world's rare earths -- 17 elements critical to manufacturing products from iPods to low-emission cars. But its rare earths reserves accounts for just 23 percent of the world's total.