[Weekly Review] Terminal Demand Failed to Improve Significantly with Downstream Players Restocking only on Dips

SHANGHAI, Aug 29 (SMM) - Rare earth products prices extended the decline last week, with the declining slowing down in the second half of the week. In terms of market transactions, the inquiries and trading atmosphere both picked up compared with a week ago, but most of the transactions were the random restocking of a few metals factories. Since most magnetic material companies failed to see substantial growth in orders received, it was still early to say that the terminal demand has improved.      

As of August 26, the SMM transaction price of PrNd oxide stood at 630,000-640,000 yuan/mt, down 75,000 yuan/mt from last Friday; dysprosium oxide 2,180-2,200 yuan/kg, down 60 yuan/kg; terbium oxide 13-13.2 million yuan/mt, down 425,000 yuan/mt; PrNd alloy 760,000-770,000 yuan/mt, down 110,000 yuan/mt; lanthanum and cerium products were relatively stable.

Around the end of last week, the separation enterprises were increasingly confident that the prices would repair, hence were unwilling to lower the quotes voluntarily. The prices offered at present were quite resilient and indicated that the sellers stood wait-and-see. Metals factories rarely purchased apart from rigid demand. The current mainstream transaction price of PrNd oxide was around 635,000 yuan/mt, and there were few sources with prices below 630,000 yuan/mt. The inquiries for dysprosium and terbium were less than that for PrNd products. The transaction price range of dysprosium oxide was 2.18-2.2 million yuan/mt, and terbium oxide 13-13.1 million yuan/mt.

The prices of metals fluctuate with the oxides. At present, the transaction price of spot PrNd alloy stood between 760,000-770,000 yuan/mt, or 780,000 yuan/mt with credit. Inquiries for dysprosium iron were scarce, and the quotations from cargo holders have been significantly lowered last week to 2.17-2.19 million yuan/mt. The market situation of terbium metal was relatively similar, and magnetic materials companies made few inquiries and transactions.

SMM believes that following the release of the second batch of rare earth mining and smelting/separation quotas this year by the Ministry of Industry and Information Technology last week, the market pessimism has increased, which has led to a comprehensive correction in the prices of rare earth products. The prices stabilised in the second half of last week, and the transactions of PrNd products picked up slightly. Nonetheless, SMM believes that in the medium and long term, the development in the application fields of rare earth products is still optimistic. However, it is still early to say that the demand has already improved substantially due to the pandemic outbreak since the beginning of this year, the hindered transmission of surging raw material prices to the downstream, the power rationing in summer as well as falling orders received by magnetic material enterprises YoY. Therefore, rare earth products prices will  stay under pressure in the near term.