China Northern Rare Earth lowered transaction price of rare earth concentrate in the second quarter to 16,792 yuan/ton [SMM News]

Northern Rare Earth announced on the evening of April 9 that based on the pricing method of rare earth concentrate and the price of rare earth oxides in the first quarter of 2024, after calculation and approval by the company's 6th General Manager's Office Meeting in 2024, the transaction price of rare earth concentrate in the second quarter of 2024 was adjusted to 16,792 yuan/ton (dry basis, REO=50%) excluding tax. For every 1% increase or decrease in REO, the price excluding tax will increase or decrease by 335.84 yuan/ton. Compared with the first quarter of 2024, it decreased by 3,945 yuan/ton, a month-on-month decrease of 19.02%.

The transaction price of rare earth concentrate in the second quarter of Northern Rare Earth fell by 3,945 yuan/ton compared with the first quarter of 2024, a month-on-month decrease of 19.02%.

Northern Rare Earth announced on the evening of April 9 that based on the pricing method of rare earth concentrate and the price of rare earth oxides in the first quarter of 2024, after calculation and approval by the company's 6th General Manager's Office Meeting in 2024, the transaction price of rare earth concentrate in the second quarter of 2024 was adjusted to 16,792 yuan/ton (dry basis, REO=50%) excluding tax. For every 1% increase or decrease in REO, the price excluding tax will increase or decrease by 335.84 yuan/ton. Compared with the first quarter of 2024, it decreased by 3,945 yuan/ton, a month-on-month decrease of 19.02%.

Northern Rare Earth announced on the evening of January 9: Based on the pricing method of rare earth concentrate and the price of rare earth oxides in the fourth quarter of 2023, after calculation and approval by the company's first general manager's office meeting in 2024, the transaction price of rare earth concentrate in the first quarter of 2024 was adjusted to 20,737 yuan/ton (dry basis, REO=50%) excluding tax, an increase of 201 yuan/ton compared with the fourth quarter of 2023, a month-on-month increase of 0.98%.

The announcement also shows that Northern Rare Earth held the 25th meeting of the 8th Board of Directors on March 14, 2023 and the first extraordinary shareholders' meeting in 2023 on March 30, 2023, and reviewed and approved the "Proposal on the Pricing Mechanism of Routine Related Transactions of Rare Earth Concentrates and the Implementation in 2022 and the Forecast for 2023". The company and its affiliated company Inner Mongolia Baotou Steel Union Co., Ltd. have agreed that from April 1, 2023, while the rare earth concentrate pricing formula remains unchanged, in the early first month of each quarter, the company's management will calculate and adjust the rare earth concentrate price based on the rare earth concentrate pricing formula , and renegotiate the rare earth concentrate supply contract or supplementary agreement and make an announcement.

Northern Rare Earth issued an announcement on the evening of October 8, 2023, stating that based on the rare earth concentrate pricing method and the price of rare earth oxides in the third quarter of 2023, it has been calculated and reviewed by the company at the 18th general manager meeting of 2023 held on October 8, 2023. The office meeting reviewed and approved that the rare earth concentrate trading price in the fourth quarter of 2023 was adjusted to 20,536 yuan/ton excluding tax (dry basis, REO = 50%). For every 1% increase or decrease in REO, the excluding tax price would increase or decrease by 410.72 yuan/ton. The company will re-sign the "Rare Earth Concentrate Supply Contract" with Baosteel Co., Ltd. and execute rare earth concentrate related transactions in accordance with the newly signed contract.

Northern Rare Earth announced on July 9, 2023 that: Based on the rare earth concentrate pricing method and the price of rare earth oxides in the second quarter of 2023, it was calculated and verified by the company’s 13th General Manager Office Meeting in 2023 held on July 9, 2023. After review and approval, the rare earth concentrate trading price in the third quarter of 2023 was adjusted to 20,176 yuan/ton excluding tax (dry basis, REO = 50%). For every 1% increase or decrease in REO, the excluding tax price increased or decreased by 403.52 yuan/ton. The company will re-sign the "Rare Earth Concentrate Supply Contract" with Baosteel Co., Ltd. and execute rare earth concentrate related transactions in accordance with the newly signed contract.

Northern Rare Earth’s previous announcement shows: Based on the rare earth concentrate pricing method and the price of rare earth oxides in the first quarter of 2023, it was calculated and approved by the company’s 7th General Manager Office Meeting in 2023 held on April 7, 2023. In the second quarter of the year, the trading price of rare earth concentrates was adjusted to 31,030 yuan/ton (dry basis, REO = 50%) excluding tax. For every 1% increase or decrease in REO, the price excluding tax increased or decreased by 620.6 yuan/ton (Baotou Steel Co., Ltd. still needs to perform decision-making procedures).

Northern Rare Earth’s previous announcement showed that the price of rare earth concentrate related transactions in the first quarter of 2023 and the expected price in 2023 were calculated according to the above formula and the price of rare earth oxides in the fourth quarter of 2022. After negotiation between the two parties, the price of rare earth concentrate in the first quarter of 2023 was 35,313 yuan/ton excluding tax (dry basis, REO=50%). For every 1% increase or decrease in REO, the price excluding tax increased or decreased by 706.26 yuan/ton.

From the changes in the trading price of northern rare earth concentrate in the two quarters of 2024, it can be seen that the trading price of northern rare earth concentrate increased slightly in the first quarter of this year, and decreased significantly in the second quarter.

The sharp decline in rare earth concentrate transaction prices in the second quarter may affect some industry players' expectations for the future of rare earths

On April 9, rare earth prices generally showed a downward trend. According to SMM, the mainstream transaction price in the praseodymium and neodymium oxide market was reduced to 370,000-375,000 yuan/ton on the 9th. The mainstream prices of PrNd alloy were stable at 465,000-475,000 yuan/ton.

According to SMM's research, the price of rare earth oxides has risen too fast recently, and most industry players are afraid of high prices. Downstream purchasers also find it difficult to accept the excessively high prices of raw materials, and the actual trading volume in the rare earth market is not good. Under this circumstance, some holders are eager to ship out the goods, and the actual transaction price of rare earths has also begun to fall. But raw materials prices were supported. Nonetheless, the sharp reduction in the trading price of rare earth concentrate by Northern Rare Earth and Baosteel Group in the second quarter of 2024 may affect some industry players' expectations for the future price of rare earths.