SHANGHAI, Aug 1 (SMM) - As of July 29, the mainstream prices of PrNd oxide were lowered to 800,000-810,000 yuan/mt, down 13% from 930,000 yuan/mt at the beginning of the month. The prices of PrNd alloy also dropped to 970,000-980,000 yuan/mt, down 14% from 1.13 million yuan/mt early in July.
Since the pandemic outbreak in the second quarter, the terminal demand for rare earths weakened. Coupled with the slow recovery of the general environment and economic situation, and the limited increase in downstream consumption, the orders received by magnetic material companies decreased to varying degrees.
Therefore, despite upstream cost support and tight supply, rare earth prices were still on the downward track in July.
The prices of PrNd oxide bottomed out approaching the month-end to 820,000-820,000 yuan/mt, followed by PrNd alloy whose prices rose to 0.99-1 million yuan/mt. However, after a short-lived rally, the prices were back to the downward trajectory.
Cost: On July 29, the prices of scrap excluding tax were lowered from 900,000 yuan/mt at the beginning of the month to 780,000 yuan/mt, a collective drop of 13%. The decline in scrap prices was mainly due to falling PrNd oxide prices, which resulted in losses of scrap enterprises and. The supply of scrap remained tight.
Supply: China’s ore imports totalled 7,347 mt in June, up 55.3% MoM. Among them, 6,786 mt of light rare earth ore were imported, and 561 mt of middle and heavy rare earth ore. Domestic light rare earth mines operated normally, while ion mines in south China maintained low operating rates except those in Hunan Province. Therefore, the supply of middle and heavy ion ores was still insufficient, and the supply of light rare earth ores was moderate.
Demand: The orders of magnetic material companies did not improve in July, and the spot purchases in the market were relatively scarce. Dropping rare earth prices also prompted enterprises to reduce their in-plant stocks. The order volume of magnetic material enterprises decreased to varying degrees. The top-tier enterprises suffered less. The orders of some large manufacturers fell around 20%, and some small and medium-sized magnetic material enterprises 30-40%. Due to the limited terminal demand, the competitive pressure of magnetic material enterprises increased.
Market sentiment: Most of the industry players were not optimistic about the market in July. The rare earth prices were already on the downward track in June, and the industry players worried that the demand side would be difficult to recover, hence purchased with cautiousness. In addition, the terminal demand for rare earths remained weak, and the orders from magnetic material companies were relatively small, resulting in few spot demand for PrNd alloy. Separation companies intended to sell at high prices, but lacked support with the absence of market confidence. Metal factories and magnetic material companies were strongly wait-and-see, and less enthusiastic about purchasing raw materials.
To sum up, although the cost and supply offered some support for the rare earth prices, the weak downstream demand and insufficient orders weighed on the overall performance of the rare earth market in July.
![In the Market, Although Rare Earth Prices Outside China Fell, Premiums Remained Significant; Industrially, Lynas Aggressively Expanded Into Medium-Heavy Rare Earth [SMM Rare Earth Weekly Review Outside China]](https://imgqn.smm.cn/usercenter/aKNUH20251217171744.jpg)
