Rare Earth Price Fluctuations Are Frequent: Is There Still Upside Room in the Market Outlook? [SMM Analysis]

SMM reported on March 2: In February 2025, the rare earth market overall showed a trend of fluctuating upward. Major products such as Pr-Nd oxide, dysprosium oxide, and terbium oxide experienced varying degrees of price increases. For instance, the price of Pr-Nd oxide reached 450,000 yuan/mt in late February, marking an increase of over 8% compared to early February. This price growth was mainly attributed to the improvement in the supply-demand structure and the impact of favorable policies.

Supply side, after the Chinese New Year holiday, the production capacity recovery of some rare earth producers was relatively slow, leading to tight spot supply. Demand side, although the consumption capacity of magnetic material enterprises had not fully recovered, downstream metal enterprises were actively inquiring. A series of policies targeting end-use development released before the Chinese New Year led most market participants to hold high expectations for the rare earth market outlook. Suppliers maintained firm offers, causing low-priced cargoes to tighten rapidly.

Additionally, in mid-February, the Ministry of Industry and Information Technology (MIIT) released the "Interim Measures for the Total Volume Control and Management of Rare Earth Mining and Rare Earth Smelting and Separation (Draft for Public Comment)" and the "Interim Measures for the Traceability Management of Rare Earth Products (Draft for Public Comment)," which significantly boosted market confidence. Following the release of these documents, rare earth raw material prices surged sharply. However, the release of end-use demand did not keep pace, resulting in a noticeable jump initially and then pull back in rare earth prices by month-end.

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According to the SMM survey, most market participants still hold high expectations for the rare earth market outlook. Supply side, the short-term recovery of ion-adsorption ore imports remains challenging, and the supply of rare earth raw materials continues to be tight. Demand side, favorable end-use policies are expected to drive the continuous release of downstream rare earth demand. Rare earth prices are expected to fluctuate upward in the short term.