Downstream demand diverges, medium-heavy rare earth prices may continue to fluctuate at highs. [SMM Analysis]

Published: Apr 17, 2025 16:21

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【SMM Analysis: Downstream Demand Diverges, Medium-Heavy Rare Earth Prices May Continue to Fluctuate at Highs】Current downstream demand shows divergence: on one hand, long-term demand from NEVs and wind power supports the strategic position of rare earths, while robotics and the low-altitude economy may become new growth points for downstream rare earth demand; on the other hand, magnetic material factories, facing high cost pressure, choose to "tighten their wallets," resulting in post-holiday order growth falling short of expectations and leading to more cautious raw material purchases by downstream players.

SMM April 17 News: Current downstream demand shows divergence. On one hand, long-term demand from NEVs and wind power supports the strategic position of rare earths, while humanoid robots and the low-altitude economy may become new growth points for downstream rare earth demand. On the other hand, magnetic material manufacturers, facing high cost pressures, are "tightening their wallets," with post-holiday order growth falling short of expectations, leading to more cautious raw material purchases by downstream players.

It is understood that global NEV sales are expected to reach 10 million units in 2025, which will significantly increase the demand for rare earth permanent magnets. Additionally, the humanoid robot market may add a demand of 200,000-400,000 mt, further supporting rare earth prices. Meanwhile, it is worth noting that after China's export restrictions, overseas markets will face shortages of medium-heavy rare earths, and overseas rare earth prices are expected to rise significantly in the short term. Similar to China's previous export controls on minor metals such as germanium and indium, the price spread between domestic and overseas markets may further widen, driving the price center of domestic medium-heavy rare earths upward.

Future trend predictions suggest that in the short term, medium-heavy rare earth prices will maintain an upward fluctuation driven by policy tightening, demand growth, and rising costs. However, risks of price volatility may arise from international trade frictions, economic fluctuations in major consumer countries, accelerated rare earth resource development in other countries, and technological breakthroughs in alternative materials.

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