Rare Earth Oxide Prices Extended Losses

SHANGHAI, Mar 18 (SMM) - Downstream sectors like new energy vehicles, wind turbines demonstrate strong demand, and large-scale magnetic material enterprises have been flooded with long-term orders. The four major magnetic material companies are expected to expand their production capacity by 29,000 mt in 2022, generating demand for at least 7,800 mt of praseodymium and neodymium (PrNd) alloy.

Rare earth metal enterprises have successively completed new production capacity and start commissioning in the first half of 2022. However, the oxide production capacity is still unable to match the expanding metal production capacity due to limited separation/smelting quotas and the long construction cycle of new production lines.

As the supply is mostly in the form of long-term orders, the supply tightness of PrNd oxide of some large rare earth groups has intensified, and most of their subsidiaries in Inner Mongolia have already been producing at full capacity. In light of tight supply, sources of PrNd oxide provided to alloy OEM companies have been running short, creating demand for spot PrNd oxide.

The prices of rare earth oxides continued to decline this week, and traders left the market by liquidating their stocks. The mainstream transaction prices of PrNd oxide dropped to 1.02 million yuan/mt, the lowest level since the beginning of 2022. Some large rare earth groups purchased PrNd oxide in batches this week. The largest single transaction reached a volume of 100 mt. The supply tightness of PrNd alloy under long-term orders is expected to ease to some extent in March and April. The new separation capacity will be completed and put into operation in the second half of 2022, and it is expected that some large rare earth groups will increase the supply capacity of PrNd oxide also in the second half of the year.