Pr-Nd Led the Gains in H1; 10 Rare Earth Enterprises' Semi-Annual Reports Brought Good News; Peak Season Approaching—Can the Market Rally Resume? [SMM Special]

Editor's note: A review of the H1 rare earth market shows that effort was rewarded: the rare earth sector drifted higher overall, though performance varied across products. In H1, Pr-Nd oxide rose 22.42%, dysprosium oxide rose 5.97%, and terbium oxide rose 8.37%. As prices climbed, the increase directly added to the operating earnings of companies along the industry chain. According to SMM statistics, the 10 rare earth-related companies that have disclosed semi-annual reports, preliminary earnings reports, and earnings forecasts all achieved varying degrees of earnings growth in H1. The market is now eagerly awaiting traditional peak-season demand to materialize. At the transition from summer to autumn, will the H2 rare earth market extend the H1 uptrend, and what market conditions will emerge for upstream and downstream segments of the rare earth industry chain?

Multiple Rare Earth Companies Deliver Upbeat H1 Results

According to the semi-annual earnings forecast disclosed by China Rare Nonferrous Metals Co., Ltd. on the evening of July 13, based on preliminary estimates by the company's finance department, H1 2026 net profit attributable to shareholders of the listed company was expected to be RMB370 million to RMB430 million, an increase of RMB297.5013 million to RMB357.5013 million compared with the same period last year, or up 410.35% to 493.11% YoY. H1 2026 net profit attributable to shareholders of the listed company excluding non-recurring gains and losses was expected to be RMB368.0027 million to RMB428.0027 million, an increase of RMB276.2326 million to RMB336.2326 million compared with the same period last year, or up 301.00% to 366.39% YoY.

Regarding the main reasons for the expected profit growth, China Rare Nonferrous Metals Co., Ltd. stated: (1) In H1 2026, the rare earth industry's supply-demand pattern changed and prices of major rare earth products rose YoY; by innovating its integrated operating model, coordinating rare earth raw material procurement for its separation plants and market sales of all products, analyzing changes in market supply and demand, and dynamically adjusting its product output structure, the company achieved a significant increase in the operating value of its main rare earth business. (2) The company made strong efforts to turn around loss-making enterprises and deepen reforms, achieving notable results; resources were further concentrated in its core business and competitive businesses, and losses at loss-making enterprises narrowed substantially YoY. (3) Dabaoshan Company, in which the company holds a stake, maintained stable and high production; sales volumes and prices of copper and sulfur products both rose YoY, boosting its profit, and the company recognized higher investment income under the equity method.

According to the semi-annual earnings forecast disclosed by Huahong Technology on the evening of July 13, net profit attributable to the parent company in H1 2026 was expected to be RMB320 million to RMB360 million, up 301.84% to 352.08% YoY.

Regarding the reasons for the performance change, Huahong Technology stated: In H1 2026, supported by industry policies and stronger downstream demand, prices of major rare earth products in China climbed steadily. The company's rare earth resources comprehensive utilization segment seized market opportunities, gave full play to its comprehensive advantages in capacity scale, cost control and process technology, and continued to optimize coordination among supply, production and sales as well as inventory management strategies, effectively driving the full release of the segment's profitability. The company continued to deepen its rare earth industry chain layout, and its downstream rare earth permanent magnet materials business expanded steadily. Supported by stable demand from end-use sectors such as NEVs, wind power and industrial automation, the segment continued to expand in scale, and its revenue and product mix kept improving, making it an important supplement to performance growth.

The interim earnings estimate released by Xiamen Tungsten showed that, according to preliminary estimates by its financial department, net profit attributable to shareholders of the listed company for H1 2026 was expected to be approximately 2.216 billion yuan, an increase of approximately 1.247 billion yuan from the same period last year, or up approximately 128.62% YoY. According to preliminary estimates by its financial department, net profit attributable to shareholders of the listed company after deducting non-recurring gains and losses for H1 2026 was expected to be approximately 2.176 billion yuan, an increase of approximately 1.253 billion yuan from the same period last year, or up approximately 135.87% YoY.

Regarding the main reasons for the expected profit growth in the period, Xiamen Tungsten stated: In H1 2026, amid a market environment in which prices of major raw materials such as tungsten, cobalt, lithium carbonate and Pr-Nd oxide rose YoY and swung wildly, the company responded actively, dynamically adjusted its operating strategy, and drove product selling prices up in tandem. At the same time, it continued to improve product quality and market development capabilities; sales of major products such as alloy bars, cutting tools, power battery cathode materials and magnetic materials grew steadily, and profits of its three core businesses—tungsten and molybdenum, new energy materials and rare earths—improved to varying degrees.

The earnings estimate disclosed by Ningbo Yunsheng on the evening of July 14 showed that, according to preliminary estimates by its financial department, net profit attributable to shareholders of the listed company for H1 2026 was expected to be between 240 million and 310 million yuan, an increase of 132.1657 million to 202.1657 million yuan compared with the same period last year (statutorily disclosed data), or up 122.56% to 187.48% YoY. The company expects its H1 2026 net profit attributable to shareholders of the listed company after deducting non-recurring gains and losses to be RMB210 million to RMB280 million, representing an increase of RMB121.3954 million to RMB191.3954 million compared with the same period last year (statutory disclosed data), up 137.01% to 216.01% YoY.

Ningbo Yunsheng said the main reasons for this expected profit increase were as follows: during the reporting period, the company adhered to a customer-demand-oriented approach, focused deeply on NEV, consumer electronics, industrial and other application fields, actively developed emerging and regional markets, seized opportunities from new project development, continuously optimized its business mix, and raised the proportion of revenue from outside China. At the same time, the company continued to deepen refined management, which lifted product gross margins and led to an increase in net profit.

According to the H1 results forecast released by China Northern Rare Earth, based on preliminary calculations by the company's finance department, the company expects its H1 2026 net profit attributable to owners of the parent company to be RMB1.98 billion to RMB2.06 billion, representing an increase of RMB1.05 billion to RMB1.13 billion compared with the same period last year (statutory disclosed data), up 112.74% to 121.33% YoY. The company also expects its H1 2026 net profit attributable to owners of the parent company after deducting non-recurring gains and losses to be RMB1.99 billion to RMB2.07 billion, representing an increase of RMB1.093 billion to RMB1.173 billion compared with the same period last year (statutory disclosed data), up 121.90% to 130.82% YoY.

The main reasons for this period's expected profit increase are as follows:

In H1 2026, the company served the national rare earth resource strategy and fully implemented the safety management and control requirements of the rare earth industry chain. Affected by factors such as supply constraints in the raw material market and the multi-point release and sustained growth of downstream demand, rare earth product prices showed an overall strengthening trend and consolidated. Centering on its annual production and operation targets, the company made overall plans and adopted comprehensive measures. It strengthened comprehensive budget management, made coordinated efforts to reduce costs, improve quality and increase efficiency, scientifically organized production and scheduling, intensified marketing operations, deepened reform and innovation, strengthened group management and risk prevention and control, promoted the deep integration of professional management, lean management and 5S management with high quality, advanced key project construction, accelerated the development of new quality productive forces through management and scientific research innovation, and leveraged its sound industry chain value-creation capability and core competitiveness to provide solid support and assurance for achieving sound operating results.

The company scientifically refined its production organization and operations; production of rare earth smelting and separation products, rare earth metals, and new rare earth materials all reached record highs for the same period in history; its subsidiary Inner Mongolia Northern Rare Earth Magnetic Materials Co., Ltd. achieved revenue of about RMB9.5 billion in H1, up about 107% YoY, and maintained growth momentum for three consecutive years; its subsidiary Inner Mongolia Xi'aoke Hydrogen Storage Alloy Co., Ltd. officially put the first batch of 1,000 hydrogen-powered two-wheelers into operation in Baotou, with a cumulative safe driving mileage of 170,000 kilometers, and the demonstration project produced notable results. The Company benchmarked against advanced internal and external practices to tap internal potential, strengthened refined management, and significantly improved multiple economic and technical indicators. It implemented targeted measures across each business segment: the smelting and separation segment overcame new production cost changes brought by rising raw and auxiliary material prices, effectively controlled cost fluctuations, scientifically organized production and scheduling, and ensured product supply to meet new demand; the rare earth metals segment focused on strengthening lean production concepts, used digital and intelligent tools to further strengthen on-site process operation management, and drove new breakthroughs in economic and technical indicators such as quality and material consumption ratios; the rare earth new materials and applications segment fully leveraged the advantages of newly added capacity, precisely aligned with customer needs, and made new progress in promoting sales through production. The Company deepened industry chain coordination and linkage, and consolidated the foundation of cooperation with downstream customers while ensuring stable product supply.

On July 10, Shenghe Resources released its H1 earnings forecast, showing that, according to preliminary calculations by the company's finance department, net profit attributable to owners of the parent for H1 2026 was expected to be 800 million yuan to 930 million yuan, an increase of 423.0938 million yuan to 553.0938 million yuan compared to the same period last year, up 112.25% to 146.75% YoY. Net profit attributable to owners of the parent after deducting non-recurring gains and losses for H1 2026 was expected to be 790 million yuan to 920 million yuan, an increase of 426.487 million yuan to 556.487 million yuan compared to the same period last year, up 117.32% to 153.09% YoY.

Regarding the main reasons for the expected increase in performance for the period, Shenghe Resources said: During the reporting period, affected by factors such as rare earth industry policies and downstream demand, overall market demand for major rare earth products improved, and average selling prices of products rose substantially compared to the previous year. The Company seized market opportunities, optimized its production and sales structure, strengthened management empowerment and cost control, thereby driving substantial growth in performance.

The semi-annual report recently released by China Rare Earth showed that, in H1, the rare earth industry's supply-demand pattern continued to adjust and improve. Boosted by multiple favorable factors, including rare earth industry policies and stronger downstream market demand, overall market conditions moved upward; Pr-Nd product prices rose significantly compared to the same period last year. In accordance with its annual work arrangements, the Company anchored its goals and intensified efforts, seized the momentum and strived for excellence, strengthened Party-building leadership, and focused on six key tasks, including resource security, efficient operations, technological innovation, project construction, deepening reform, and capability building. It made targeted efforts, achieved notable phased results, improved operational quality and efficiency simultaneously, successfully completed all operational targets, and strove to create a new situation of high-quality leapfrog development, laying the foundation for a good start to the 15th Five-Year Plan. In H1, the company recorded operating revenue of 1.647 billion yuan, net profit attributable to shareholders of the listed company of 237 million yuan, up 46.53% YoY, and net profit attributable to shareholders of the listed company excluding non-recurring gains and losses of 240 million yuan, up 55.49% YoY.

The H1 earnings forecast disclosed by Tianhe Magnetics on July 9 shows that, according to preliminary estimates by the finance department, net profit attributable to owners of the parent company for H1 2026 is expected to be 73 million to 93 million yuan, an increase of 19.5448 million to 39.5448 million yuan compared with the same period last year (statutorily disclosed data), up 36.56% to 73.98% YoY. Net profit attributable to owners of the parent company excluding non-recurring gains and losses for H1 2026 is expected to be 68 million to 88 million yuan, an increase of 32.5723 million to 52.5723 million yuan compared with the same period last year (statutorily disclosed data), up 91.94% to 148.39% YoY.

Regarding the main reasons for the expected H1 earnings increase, Tianhe Magnetics said: 1. In H1, raw material prices fluctuated at high levels overall. The company optimized pricing strategies for some existing and new orders and raised product selling prices.2. In 2026, the company proactively seized market opportunities, carried out sales work centered on “focusing on emerging markets, deepening customer relationships, and optimizing channel layout,” achieved dual-engine growth in international and domestic markets, and delivered notable market development results. Overall operating revenue is expected to increase by about 30% YoY, with domestic business revenue expected to rise about 50% YoY. 3. In the reporting period, the impact of non-recurring gains and losses on net profit is expected to be about 5 million yuan, compared with after-tax non-recurring gains and losses of 18.0275 million yuan in the same period last year.

The H1 earnings forecast released by JL MAG Rare-Earth on July 1 shows that net profit attributable to the parent company in H1 2026 is expected to be 400 million to 460 million yuan, up 31.17%-50.84% YoY.

Regarding the reasons for the earnings change, JL MAG Rare-Earth said in its announcement:1. In H1 2026, the management upheld the annual operating policy of “adhering to legal compliance and customer orientation, focusing on the core magnetic materials business, building 20,000 mt of new capacity on schedule, actively expanding into motor rotors for humanoid robots, and scaling new heights.” Through measures including technological innovation, organizational optimization, digitalization, and lean management, the company achieved steady growth in operating performance while making every effort to ensure contract fulfillment and delivery to customers. The company continued to consolidate its leading position in the new energy and environmental protection sectors and actively expanded into emerging markets, with operating revenue expected to increase by about 30% YoY. Specifically, in the NEV and automotive parts segment, operating revenue rose about 30% YoY; in the robotics and industrial servo motor segment, operating revenue rose about 90% YoY, and small-batch deliveries of embodied robot motor rotor products have already been made.2. During the reporting period, the impact of non-recurring gains and losses on net profit is expected to be approximately RMB32 million, compared with after-tax non-recurring gains and losses of RMB70.9405 million in the same period last year. 3. In the current reporting period, expenses such as share-based payment expenses and financial expenses arising from A-share and H-share equity incentive plans and the issuance of H-share convertible bonds totaled approximately RMB121 million, while no such expenses occurred in the same period last year.

According to the H1 2026 earnings flash report released by Zhong Ke San Huan on the evening of July 20, in H1 the company achieved operating revenue of RMB3,613.7721 million, up 23.67% YoY; total profit of RMB102.8001 million, up 1.18% YoY; net profit attributable to shareholders of the publicly listed firm of RMB49.2189 million, up 11.88% from the prior-year period; and after deducting government grants and other non-recurring gains and losses, net profit attributable to shareholders of the publicly listed firm of RMB32.3035 million, up 2.25% from the prior-year period.

According to Zhong Ke San Huan's semi-annual earnings flash report, in H1 2026, amid increasingly fierce market competition and a complex and volatile external environment, with the joint efforts of all employees, the company's core product sales increased YoY. Through cost reduction measures such as optimizing formulation processes and reducing heavy rare earth usage, the company lifted its blended gross margin YoY; some subsidiaries improved their operations and narrowed losses or turned profitable; meanwhile, the company further improved inventory management and optimized the structure of key raw material inventories, resulting in a YoY decrease in asset impairment losses. Affected by the appreciation of the RMB against the US dollar and the euro, the company incurred foreign exchange losses during the reporting period, and financial expenses increased YoY, partially offsetting the profit growth.

H1 This Year: Pr-Nd Oxide Up 22.42%; Dysprosium Oxide and Terbium Oxide Both Increased

In H1 2026, the rare earth oxide market experienced a roller-coaster ride of "sharp rise—sharp drop—recovery—renewed divergence." Pr-Nd oxide prices were the most volatile, while dysprosium oxide and terbium oxide prices first rose, then fell, and then rebounded. Looking back at the H1 price trends of Pr-Nd oxide, dysprosium oxide and terbium oxide:

the average price of Pr-Nd oxide on June 30 was 742,500 yuan/mt, up 136,000 yuan/mt from its December 31, 2025 average of 606,500 yuan/mt, an H1 increase of 22.42%. Meanwhile, the H1 daily average price of Pr-Nd oxide this year was 740,530.17 yuan/mt, up 3,095,771.8 yuan/mt YoY from its H1 2025 daily average of 430,952.99 yuan/mt, a YoY increase of 71.84%.

The average price of dysprosium oxide on June 30 was 1,420 yuan/kg, up 80 yuan/kg from its December 31, 2025 average of 1,340 yuan/kg, an H1 increase of 5.97%. Comparing its H1 2026 daily average of 1,394.09 yuan/kg with its H1 2025 daily average of 1,660.26 yuan/kg, its H1 daily average fell 16.03% YoY.

The average price of terbium oxide on June 30 was 6,475 yuan/kg, up 500 yuan/kg from its December 31, 2025 average of 5,975 yuan/kg, an H1 increase of 8.37%. Comparing its H1 2026 daily average of 6,200.26 yuan/kg with its H1 2025 daily average of 6,634.62 yuan/kg, its H1 daily average fell 6.55% YoY.

Since the start of August, the rare earth market has moved sideways in a narrow range amid the tug-of-war between upstream and downstream. At present, downstream inquiry and buying interest is low, inquiry activity remains limited, the overall trading atmosphere is sluggish, and rare earth prices continue to diverge: in the Pr-Nd market, the continued pullback in futures prices has prompted some suppliers to lower quotes slightly; medium-heavy rare earth prices have shown relatively strong resilience and remained broadly stable. In the short term, due to the stalemate in market trading, Pr-Nd product prices are expected to continue to consolidate in a narrow range.

In the medium and long term, SMM expects that Pr-Nd oxide supply will remain fundamentally tight in 2026, but as new capacity gradually comes online in H2 and previously uncommissioned smelting and separation capacity is planned to start up, pressure from a looser supply side may gradually emerge. Demand side, rising toll-processing orders at metal producers in Inner Mongolia will provide a degree of rigid demand support for Pr-Nd oxide. As the traditional “September-October peak season” approaches, the market holds strong expectations for downstream restocking and stockpiling, and end-use demand still has a considerable number of NEV orders awaiting concentrated release in H2; the industrial robot sector remains prosperous, and demand for rare earth permanent magnets is expected to show significant YoY growth during the year. Meanwhile, although emerging sectors such as humanoid robots and the low-altitude economy are developing rapidly and have ample long-term growth potential, they are still in the early stages of industrial cultivation, and their actual incremental contribution to rare earth permanent magnets remains limited. Whether peak-season demand expectations are realized and the pace of new capacity release will be key variables shaping the rare earth market.

Voices from Various Parties

A Datong Securities research report on August 11 showed: rare earth spot prices pulled back in the short term, and downstream magnetic material enterprises remained cautious in purchasing. However, under triple supply constraints—tighter mining quotas, escalating export controls, and production cuts in scrap recycling—plus restocking demand outside China, the strategic revaluation logic has not wavered. Overall, policy controls and emerging industry demand are twin drivers of the minor metal sector; the commodity and financial attributes of scarce resources reinforce each other, and the valuation recovery trend continues.

A China Securities research report said that, according to General Administration of Customs data, rare earth exports fell notably in July, while average prices rose. July rare earth export volume was 4,223.5 mt, down 29.54% YoY and down 17.26% MoM, the lowest monthly level since March. Cumulative exports in January-July were 34,706.3 mt, down 10% YoY. However, the corresponding average export price was $12.34/kg, up 103.14% YoY; the export mix shifted toward high-value medium-heavy rare earth products; markets outside China are accepting high-priced raw materials; and the global tight supply pattern for rare earths persists. On the rare earth supply side, there is no supply growth for now; separation enterprises are producing steadily; previously halted enterprises have no plans to resume production for now; downstream rigid demand provides moderate support; and long-term demand expectations are improving. Rare earth prices are expected to consolidate on a strong note in the near term.

A CITIC Securities research report said that, against a backdrop of quota constraints and declining imports, rare earth supply rigidity continues to strengthen. Affected by stricter tax policies, scrap recycling enterprises' operating rates remain persistently low. Rigid-demand restocking along the industry chain and the approaching peak season are expected to drive demand recovery; emerging fields such as robotics, the low-altitude economy, and industrial motors are expected to open up long-term demand growth space; the rare earth industry supply-demand pattern may remain tight; and driven by price increases, H1 results of rare earth industry chain companies are expected to beat expectations. The report continues to recommend the strategic allocation value of the rare earth industry chain.