Pr-Nd Alloy Prices Surge 6.5% in a Week, Driven by Supply Tightening and Strong Demand【SMM Rare Earth Analysis】

SMM April 20: As of now, Pr-Nd alloy prices continued to rise from the morning, reaching 980,000-985,000 yuan/mt, up approximately 60,000 yuan/mt from 915,000-930,000 yuan/mt a week ago, a gain of about 6.5%. This price increase was primarily driven by expectations of supply tightening and growing end-use demand.

Supply side, China Northern Rare Earth raised its Q2 concentrate prices by 44.6% QoQ, providing solid cost support for Pr-Nd oxide. In addition, affected by multiple factors including macro policy adjustments, some separation enterprises may face production cuts or shutdowns. Against this backdrop, upstream suppliers, bolstered by cost support and expectations of supply tightening, exhibited strong bullish sentiment with weak willingness to sell at low prices. Market quotes continued to climb, pushing up procurement costs for metal enterprises.

Demand side, Pr-Nd prices continued to decline in March, and end-use demand release fell short of expectations, dampening downstream magnetic material enterprises' confidence in stockpiling. Most chose to draw down existing inventory, which laid the groundwork for subsequent price increases. Entering April, as Pr-Nd alloy prices stabilized at low levels, end-use demand orders began to surge, and magnetic material enterprises saw strong new orders. Meanwhile, existing inventory at magnetic material enterprises had fallen to low levels, further stimulating their procurement demand, strengthening their purchase willingness for Pr-Nd alloy, and enhancing their ability to accept higher-priced metal. As a result, trading activity in the Pr-Nd alloy market picked up significantly, and the market transaction center shifted progressively upward.

Overall, driven by improved supply-demand fundamentals and prevailing bullish sentiment, Pr-Nd alloy achieved a 60,000 yuan/mt increase within a single week. However, as prices continued to climb, magnetic material producers became more cautious about continued large-scale purchases given their already sizable inventory reserves, and more wait-and-see sentiment emerged in the market, causing the pace of recent price gains to slow down. Looking ahead to month-end in April, as Q2 end-use demand orders have yet to be fully released, magnetic material enterprises still have restocking needs. Meanwhile, buoyed by bullish sentiment, Pr-Nd alloy prices are expected to return to the 1 million yuan level. However, for Pr-Nd alloy priced at 1 million yuan, whether end-use demand orders can be released as expected will be the key factor determining whether prices can hold stable above 1 million yuan. Should end-use demand orders fail to materialize as expected, once market sentiment returns to rationality, Pr-Nd alloy prices may pull back below 1 million yuan, entering the next waiting cycle for end-use demand release.