SMM, May 22:
Even though market procurement demand was moderate, Pr-Nd oxide spot prices posted two consecutive increases, supported by futures fluctuations, the difficulty in sourcing low-priced spot cargoes, procurement by some major plants, and a roughly 6% MoM decline in Pr-Nd oxide production in June. Demand side, expectations of long-term demand expansion in new energy industry chains such as robotics, coupled with the approaching concentrated downstream procurement peak season in Q3 in China, and warming market expectations for a subsequent demand recovery all bolstered the rare earth permanent magnets concept on June 30. As of the close on June 30, the concept rose 2.79%. By stock: Dongfang Zirconium Industry, Sinomine Resource Group, and Zhong Ke San Huan hit the daily limit up, while Hanghua Co., Ltd., Longhua Co., Ltd., China Rare Earth Nonferrous Metals, Sinosteel NMC, and Ningbo Yunsheng led the gains.
Pr-Nd Oxide Spot Prices Post Two Consecutive Gains; June Production Declines MoM
Spot market: On June 30, the average price of Pr-Nd oxide continued to rise 0.68%, extending the previous trading day's gains.
Currently, overall rare earth market prices remained stable. The upward adjustment of Pr-Nd oxide futures prices drove concurrent increases in suppliers' spot price quotes, making low-priced oxides hard to find. However, metal enterprises adopted a cautious procurement approach due to lackluster metal inquiry conditions, resulting in moderate overall market trading activity. In the metal market, inquiry activity on the afternoon of the 30th improved somewhat, mainly driven by tender procurement from large magnetic material plants, but most magnetic material enterprises remained on the sidelines, leading to poor overall transaction performance. In the short term, absent a significant improvement in downstream demand, Pr-Nd product prices are expected to move sideways.
Supply side further provided price support logic. From a production perspective, according to SMM's latest survey, overall rare earth oxide production in June pulled back MoM, with the most notable reduction in Pr-Nd oxide, where production declined by approximately 6% MoM.
Institutional Voices
SDIC Securities emphasized that heavy rare earths, due to a sharp decline in Japanese imports, have accelerated inventory depletion, opening a window for domestic substitution, and dysprosium oxide and terbium oxide prices rebounded strongly. Materials such as AI high-capacitance MLCCs, high-end ceramic substrates, and dental zirconia all require the addition of heavy rare earths; with demand growth compounded by hard supply constraints, the price centers for both light and heavy rare earths are shifting higher in tandem. Meanwhile, clear inflationary trends are evident in AI upstream materials such as MLCC dielectric powders, low-CTE electronic fabrics, M9 copper foil, and tantalum. We remain bullish on the medium- and long-term allocation value of strategic metals including rare earths, tungsten, copper, tin, molybdenum, antimony, germanium, gallium, tantalum, niobium, uranium, rhenium, and lithium.
A research report from China Securities stated that domestic dental zirconia enterprises have confirmed "receipt of a notice from Japan's Tosoh Corporation regarding the suspension of zirconia powder supply," marking a shift in raw material shortages from expectations to reality following overseas rare earth supply restrictions. Yttria-stabilized nano zirconia (YSZ) is a high-performance ceramic material with yttrium oxide added as an additive. Due to restricted rare earth supply outside China, the price spread between Chinese and overseas markets has reached hundreds of times at its peak. The domestic price spread for yttrium oxide between Chinese and overseas markets is huge. Rare earths are indispensable additives for high-end materials and high-end manufacturing. As overseas rare earth supply tightens and the price spread between Chinese and overseas markets widens, domestic high-end materials containing rare earths are expected to gain a larger share of the global market, benefiting the upstream, midstream, and downstream segments of the rare earth industry chain.
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