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China Announces First Bidding Results for Rare Earth, SMM Reports
Dec 14,2016 11:48CST
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Source:SMM
China’s State Bureau of Statistics announced December 13 the first bidding results for rare earth this year, Shanghai Metals Market reported, with details in the table below.

SHANGHAI, Dec. 14 (SMM) – China’s State Bureau of Statistics announced December 13 the first bidding results for rare earth this year, Shanghai Metals Market reported, with details in the table below.

Product

Traded Price (10,000 yuan/tonne)

Trading Volumes (tonne)

Current Market Price (10,000 yuan/tonne)

Praseodymium oxide

32.31

5

31.8-32.5

Neodymium oxide

25.59

45

25.5-25.8

Didymium oxide

25.33

Failure

26.0-26.3

Europium oxide

42.2

60

37-42

Terbium oxide

287.72

Failure

285-290

Dysprosium oxide

125.03

280

122-124

Erbium oxide

17.11

330

16.5-17.5

Lutecium oxide

429.7

16

485-580

Yttrium oxide

2.45

670

2.10-2.20

Total

-

1,406

-

Three products in the table above are eye-catching. Didymium oxide fails to attract bidders as bidding prices are about 10,000 yuan below current market prices. In a big contrast, bidding for lutecium oxide reaches at lower-than market prices. Bidding for yttrium oxide is at prices of 2,500 yuan above market prices. Bidding prices for other products in the results are generally within current market price ranges.

Market players show mixed response to the bidding results. Sentiment in the upstream sector calmed down. In recent days, prices of major rare earth products surged with news of government crackdowns, stockpiling and environmental protection inspections. Cargo-holders of those products held back goods for more price gains, and spot supply reduced as a result. After price gains, traders turned active in asking prices, also contributing to push up market prices. Downstream producers also increased offers for fear of rising costs from surging prices, but actual purchasing volumes were limited, especially magnetic material producers. They maintain operations flat at the previous level, and most of them hold 1-2 months of inventories, except very few producers. Multiple factors have already been factored into the recent surge in prices of magnetic material products. Hence, the price in the bidding results is not higher than market spot prices, and trading volumes are also limited. The failure of bidding for praseodymium and neodymium products, which led gains recently, depressed market sentiment. Some market players told SMM that suppliers, which held back goods previously, will likely sell goods at lows, and this will raise worries over possible declines in the praseodymium and neodymium products market.

It also rumors that bidding will become a a normalized mechanism, to be held every half a month, with total volumes below 15,600 tonnes, the buying plan set in the first half of 2016. The release of bidding results is only a beginning, and the following procedure, including goods deliveries by winning bidders, will likely continue into next January or later. 

To sum up, SMM predicts that the bidding results will be unfavorable for light rare earth, but will bolster up medium and heavy rare earth, which has already held stable for a long time. But, any rising room will be small due to tepid demand, SMM adds.  

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