"October Peak Season" Falls Short: Can the Rare Earth Market Rebound in H2? [SMM Analysis]

In October, rare earth prices overall fluctuated rangebound, and the so-called "October peak season" did not boost the market. Some rare earth material prices even declined. Pr-Nd oxide prices fell by about 3% within the month, while dysprosium oxide prices dropped more significantly by 6.7%.

Starting from early October, when China Northern Rare Earth's listing prices increased lower than expected, market confidence was somewhat suppressed, indicating the overall downward fluctuation of rare earth prices throughout October. Additionally, at the end of September, the large import of Myanmar ore made the supply of rare earth ore relatively sufficient. Under these circumstances, the deduction of rare earth ore processing fees increased. With weak expectations for the future, suppliers actively quoted prices, while separation plants showed a relatively lukewarm attitude towards mining.

From mid-October, due to political issues, Myanmar once again halted rare earth ore production, which improved the weak pricing of rare earth raw materials. By the end of October, with the start of long-term contract orders from separation plants, suppliers' quotations for rare earth oxides became firm, and the overall rare earth market began to stabilize.

According to the SMM survey, currently, downstream rare earth enterprises have mediocre orders. Top-tier magnetic material enterprises have enough orders for November, but small enterprises have significantly insufficient orders, with some only able to produce until mid-November. However, the supply situation at the upstream mine end has not improved, making it difficult to procure low-priced rare earth raw materials. On the other hand, China Northern Rare Earth's listing prices for November saw a slight increase, exceeding the previous market expectation of flat prices, which somewhat boosted market confidence and provided some support for rare earth raw material prices. Considering the above factors, SMM expects rare earth prices to run steadily in the near term.