End of Seven Consecutive Increases! Bao Gang United Steel and China Northern Rare Earth's Q3 Rare Earth Concentrates Transaction Price Edged Down QoQ! [SMM Comment]

SMM, July 9:

China Northern Rare Earth announced on the evening of July 9: Based on the rare earth concentrate pricing method and Q2 2026 rare earth oxide prices, after calculation and deliberation and approval at the company's 14th General Manager Office Meeting of 2026, the company's Q3 2026 rare earth concentrate transaction price is adjusted to 38,565 yuan/mt (dry basis, REO=50%), excluding tax, with the tax-exclusive price adjusted by 771.3 yuan/mt for each 1% change in REO. Compared with the Q2 2026 rare earth concentrate transaction price of 38,804 yuan/mt, the 38,565 yuan/mt represents a decrease of 239 yuan/mt, or 0.62% QoQ. SMM understands that this decline is broadly in line with market expectations.

China Northern Rare Earth and Bao Gang United Steel's Q3 Rare Earth Concentrate Transaction Price Drops 0.62% QoQ

China Northern Rare Earth announced on the evening of July 9: The company held the 25th meeting of the 8th Board of Directors on March 14, 2023 and the first Extraordinary General Meeting of 2023 on March 30, 2023, deliberating and approving the "Proposal on the Pricing Mechanism for Daily Related-Party Transactions of Rare Earth Concentrates and the 2022 Implementation and 2023 Estimates." The company and its related party, Inner Mongolia Bao Gang United Steel Co., Ltd., agreed that starting from April 1, 2023, the company's management shall, under the unchanged rare earth concentrate pricing formula, calculate and adjust the rare earth concentrate price in the first ten days of each quarter, re-sign the rare earth concentrate supply contract or supplementary agreement, and make an announcement. For details, please refer to the announcements published on March 15, 2023 and March 31, 2023 in China Securities Journal, Shanghai Securities News, Securities Times, and on the website of the Shanghai Stock Exchange, including the "Announcement on the Pricing Mechanism for Daily Related-Party Transactions of Rare Earth Concentrates and the 2022 Implementation and 2023 Estimates" and the "Announcement of Resolutions of the First Extraordinary General Meeting of 2023 of China Northern Rare Earth." Based on the rare earth concentrate pricing method and Q2 2026 rare earth oxide prices, after calculation and deliberation and approval at the company's 14th General Manager Office Meeting of 2026, the company's Q3 2026 rare earth concentrate transaction price is adjusted to 38,565 yuan/mt (dry basis, REO=50%), excluding tax, with the tax-exclusive price adjusted by 771.3 yuan/mt for each 1% change in REO. Compared with the Q2 2026 rare earth concentrate transaction price of 38,804 yuan/mt, the 38,565 yuan/mt represents a decrease of 239 yuan/mt, or 0.62% QoQ.

China Northern Rare Earth announced on the evening of April 10: Based on the rare earth concentrate pricing method and Q1 2026 rare earth oxide prices, after calculation and deliberation and approval at the company's 6th General Manager Office Meeting of 2026, the company's Q2 2026 rare earth concentrate transaction price was adjusted to 38,804 yuan/mt (dry basis, REO=50%), excluding tax, with the tax-exclusive price adjusted by 776.08 yuan/mt for each 1% change in REO. Compared with the rare earth concentrate transaction price of 26,834 yuan/mt in Q1 this year, the 38,804 yuan/mt price reflects an increase of 11,970 yuan/mt, a QoQ increase of 44.61%.

The announcement by China Northern Rare Earth on the evening of January 9 showed: According to the rare earth concentrate pricing method and rare earth oxide prices in Q4 2025, after calculation and approval at the company's first general manager office meeting in 2026, the Q1 2026 rare earth concentrate transaction price was adjusted to 26,834 yuan/mt (dry basis, REO=50%), tax excluded, with an adjustment of 536.68 yuan/mt for each 1% change in REO. Compared with the rare earth concentrate transaction price of 26,205 yuan/mt in Q4 2025, the 26,834 yuan/mt price reflects an increase of 629 yuan/mt, a QoQ increase of 2.4%.

The rare earth concentrate transaction prices of Bao Gang United Steel and China Northern Rare Earth in Q3 edged down QoQ, ending a trend of seven consecutive increases since Q4 2024! In Q4 2024, the rare earth concentrate transaction prices of Bao Gang United Steel and China Northern Rare Earth rose 6.22% QoQ. In Q1 2025, they rose 4.7% QoQ. In Q2 2025, they rose 1.11% QoQ. In Q3 2025, they rose 1.5% QoQ. In Q4 2025, they rose 37.13% QoQ. In Q1 2026, they rose 2.4% QoQ. In Q2 2026, they rose 44.61% QoQ. In Q3 2026, they declined 0.62% QoQ.

The slight QoQ decline in the Q2 quarterly average price of Pr-Nd oxide led to a slight QoQ decline in the Q3 rare earth concentrate transaction price.

As indicated in the China Northern Rare Earth announcement, according to the rare earth concentrate pricing method and rare earth oxide prices in Q2 2026, after calculation and approval at the company's 14th general manager office meeting in 2026, the company adjusted the Q3 2026 rare earth concentrate transaction price to 38,565 yuan/mt (dry basis, REO=50%), tax excluded, with an adjustment of 771.30 yuan/mt for each 1% change in REO.

The Q2 quarterly average price of Pr-Nd oxide saw a slight decline. The average price of Pr-Nd oxide on June 30, 2026, was 742,500 yuan/mt, compared to 721,500 yuan/mt on March 31, 2026, representing an increase of 21,000 yuan/mt, a Q2 increase of 2.91%; the Q2 quarterly average price of Pr-Nd oxide this year was 735,466.67 yuan/mt, compared to 745,955.36 yuan/mt in Q1, a QoQ decrease of 10,488.69 yuan/mt, a QoQ decline of 1.41%. Given that the Q1–Q2 quarterly average price of Pr-Nd oxide fell 1.41% QoQ, the 0.62% QoQ decline in the Q3 rare earth concentrates price between China Northern Rare Earth and Bao Gang United Steel was largely in line with market expectations.

Currently, Pr-Nd oxide prices are holding steady. According to SMM quotations, the average price of Pr-Nd oxide on July 9 was 764,000 yuan/mt, unchanged from the previous trading day. Recently, inquiry activity in the Pr-Nd oxide market has somewhat declined, and the overall trading atmosphere appears slightly sluggish. Against this backdrop, quotations from oxide suppliers saw a slight downward adjustment compared with the afternoon of July 8. However, as bullish sentiment still persists in the market, the extent of the decline was limited, leaving prices basically flat with those on the morning of July 8. On the metal market side, given the relatively small fluctuations in oxide prices, quotations from metal suppliers also saw no notable adjustments, and overall prices have also remained stable. However, overall market inquiry activity decreased compared with July 8, and downstream magnetic material enterprises adopted a more wait-and-see attitude in procurement. In the short term, supported by bullish market sentiment, Pr-Nd product prices may drift higher.

In the medium and long term, entering Q3, as the rare earth industry gradually emerges from the traditional off-season, market confidence in peak season demand from traditional industries will also provide some support for rare earth prices. Going forward, attention should be paid to changes in market restocking driven by the pace of demand recovery, as well as changes in macro sentiment!