Momentum of Rare Earth Prices Contained by Weak Demand

SHANGHAI, Jan 9 (SMM) - The prices of rare earths continued to grow last week, but the growth slowed amid gradually halted logistics services as well as contracting demand from downstream magnetic material companies. However, due to the frequent production reduction and suspension of separation companies and recyclers in December 2022, spot PrNd oxide was still in serious supply shortage, sustaining the price at a high level. The shipments of dysprosium and terbium products picked up recently, and the transaction prices have also been brought down to a certain extent. Nonetheless, the market players are still quite optimistic about the rare earth market in 2023 considering the rapid development of terminal sectors and the signing of long-term orders.

According to SMM research, as of January 6, in terms of light rare earth products, the prices of PrNd oxide (daily average price) stood at 719,000 yuan/mt, up 8,000 yuan/mt from the previous week; PrNd alloy 875,000 yuan/mt, up 15,000 yuan/mt; neodymium oxide 780,000 yuan/mt, up 10,000 yuan/mt; neodymium metal 955,000 yuan/mt, flat; lanthanum oxide 6,650 yuan/mt, flat; and cerium oxide 6,800 yuan/mt, flat. For heavy rare earth, dysprosium iron prices stood at 2,485,000 yuan/mt on daily average, flat from a week ago; gadolinium iron 425,000 yuan/mt, flat; and holmium iron 950,000 yuan/mt, up 5,000 yuan/mt.

On the supply side, the prices of rare earth oxides were on the upswing due to falling supply in December. The metal factories were increasingly difficult to source oxides with logistics services suspending ahead of the Chinese New Year, and some had to rely on their in-plant raw material stocks. On the demand side, downstream magnetic material factories slowed the purchasing pace approaching the Chinese New Year, and purchased only on rigid demand while forcing down the prices. The transactions of rare earth metal fell short as a whole. SMM predicts that in the short term, the prices of rare earths will remain stable.