SMM May 19 News: Since the implementation of export controls on medium-heavy rare earths on April 4, the rare earth market has been in a prolonged slump due to export trade restrictions, with prices continuing to decline. However, by the end of April, with the issuance of the first batch of export licenses, market confidence recovered somewhat, and rare earth prices rebounded accordingly.
On May 12, the Ministry of Commerce released a joint statement on the China-US Geneva Economic and Trade Talks, announcing that both China and the US would reduce commodity tariffs to 10% and 30%, respectively, for a period of 90 days. The statement also mentioned that necessary measures would be taken to suspend or cancel non-tariff countermeasures against the US that had been in place since April 2. Some industry insiders believe that this may prompt the lifting of export controls on rare earths. The news of export license approvals at the end of April had already boosted market confidence. Influenced by this news, market confidence further strengthened, leading to a significant increase in rare earth prices and driving a notable rise in rare earth prices on May 13.
It is understood that the rare earth export control regulations issued on April 4, 2025, aim to safeguard national security and interests, fulfill international obligations such as non-proliferation, and strengthen and standardize export controls on dual-use items. However, some industry players believe that this measure is not a non-tariff countermeasure against the US. Therefore, despite the policy messages conveyed during this talk, it may not affect the implementation of rare earth export control policies.
As of now, rare earth market prices have shown a trend of initially jumping and then pulling back, followed by relative stability. Affected by export controls and the traditional off-season for magnetic material enterprises, end-use demand has not seen significant improvement. Most magnetic material enterprises find it difficult to accept high-priced metals, leading to a sluggish market trading atmosphere. Enterprises generally adopt strategies of inquiring about low-priced orders and purchasing as needed. Overall, weak end-use demand struggles to support sustained price increases, resulting in rare earth market prices initially jumping and then pulling back, followed by relative stability. Future price trends still require close attention to changes in end-use demand.
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