Rare earth market remained stable with changes in June; will an upward turning point arrive in late July? [SMM Monthly Analysis]

SMM reported on July 3:

At the beginning of June, driven by policy news, upstream suppliers significantly raised their quotes for Pr-Nd products. However, downstream demand failed to keep pace, and due to reluctance to accept high prices, Pr-Nd prices began to correct in mid-June. Nevertheless, in late June, influenced by factors such as long-term agreement deliveries at month-end, frequent tenders by large magnetic material manufacturers, and procurement by major northern manufacturers, upstream suppliers' confidence strengthened, and quotes became firmer, leading to a stabilization of Pr-Nd prices. During the same period, dysprosium and terbium prices generally remained in the doldrums.​

Overall, rare earth market prices in June mostly fluctuated rangebound, with production increasing MoM: Pr-Nd oxide rose by 1.48%, dysprosium oxide fell by 0.31%, and terbium oxide dropped by 1.6%. Light rare earth and medium-heavy rare earth production both increased MoM. Entering July, the rare earth market has remained stable overall.

Pr-Nd oxide rose by 1.48% in June, dysprosium oxide fell by 0.31% in June, and terbium oxide fell by 1.6% in June.

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Regarding light rare earth prices:Taking the historical price trend of Pr-Nd oxide as an example, according to SMM quotes, the average price of Pr-Nd oxide on June 30 was 444,500 yuan/mt, compared to 438,000 yuan/mt on May 30. Its average price increased by 6,500 yuan/mt in June, with a monthly increase of 1.48%. Entering July, light rare earth prices have remained stable. On July 2, the average price of Pr-Nd oxide was 444,500 yuan/mt, unchanged from June 30.

Regarding medium-heavy rare earth prices,Taking the trend of dysprosium oxide as an example, according to SMM quotes, the average price of dysprosium oxide on June 30 was 1,615 yuan/kg, compared to 1,620 yuan/kg on May 30. Its average price fell by 5 yuan/kg in June, with a monthly decrease of 0.31%. In the first two trading days of July, dysprosium oxide prices continued to remain stable at 1,615 yuan/kg.

Taking the trend of terbium oxide as an example, according to SMM quotes, the average price of terbium oxide on June 30 was 7,065 yuan/kg, compared to 7,180 yuan/kg on May 30. Its average price fell by 115 yuan/kg in June, with a monthly decrease of 1.6%. Entering July, terbium oxide prices rose slightly, reaching 7,075 yuan/kg by July 2.

Pr-Nd oxide and medium-heavy rare earth production both increased MoM in June.

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Regarding light rare earth production:

In June, Pr-Nd oxide production increased slightly MoM, with the main increase seen in Jiangxi and Shandong provinces. It is worth mentioning that the increase in Pr-Nd oxide production was mainly due to an increase in scrap recycling output. As scrap prices were favorable this month, suppliers' willingness to sell increased, and recycling volumes at scrap recycling enterprises also rose. Due to environmental protection inspections in a certain region, the production of separation plants was slightly affected in terms of raw ore output, resulting in a slight decrease in Pr-Nd oxide raw material output. However, the overall situation indicates that total Pr-Nd oxide output in June increased by 2.6% MoM.

Regarding medium-heavy rare earth production:

China’s medium-heavy rare earth oxide production saw a slight MoM rebound in June. Although ion-adsorption ore imports remained sluggish during the month and some separation enterprises reported difficulties in ore procurement, most facilities maintained relatively stable operations thanks to raw material inventory reserves. While rare earth oxide output from raw ore remained stable, production from scrap sources registered significant growth. Scrap recycling enterprises noted that the scrap market has long been a seller’s market. With NdFeB scrap prices rising in June, magnetic material enterprises showed stronger willingness to sell scrap materials. Consequently, most recycling enterprises substantially increased their operating rates during the month, becoming the primary driver behind the MoM production growth of medium-heavy rare earth oxides.

Outlook

Current market feedback suggests most industry participants, considering downstream production cycles and order rhythms, believe NdFeB industry orders are expected to gradually improve from late July. Prior to this, the rare earth market may continue to exhibit weak supply-demand dynamics: supply-side support stems from reduced raw material imports as Southeast Asia enters the rainy season, while demand remains subdued due to downstream magnetic material enterprises operating in an off-season period with limited new orders and predominantly just-in-time procurement activities, which will continue to suppress rare earth prices.

In summary, rare earth prices are highly likely to maintain their previous fluctuating trend within the existing price range during the first half of July, with upstream and downstream players mainly engaged in positional bargaining. However, as the NdFeB sector gradually emerges from the traditional off-season, most industry players anticipate order recovery starting in late July, which could stimulate rare earth procurement demand and create a phased upward price opportunity by month-end.

Market Views

[China Northern Rare Earth: Recent orders remain stable, overall performance exceeds expectations, and the company maintains an optimistic outlook on future rare earth price trends] When asked about the company’s rare earth price projections, China Northern Rare Earth responded during a recent institutional survey: Since Q1 2025, the rare earth market has shown greater vitality compared to the previous year due to upstream raw material supply tightening and downstream consumption stimulation policies. This improved market activity has supported the company’s Q1 performance. The company has seized favorable market opportunities to enhance production line efficiency, optimize raw material and product structures, expand market reach, and deepen reforms, achieving record-high production and sales volumes. In April and May, influenced by the international environment, rare earth prices experienced a brief pullback. However, as national policies gradually became clearer, attention to the rare earth industry increased, driving up product prices. Currently, the orders of the company's subsidiary, Inner Mongolia China Northern Rare Earth Magnetic Material Co., Ltd., are relatively robust, and the company holds an optimistic outlook on future rare earth price trends.Click for details

Oriental Securities believes that benefiting from the continuous optimization of the rare earth industry's supply structure, upstream smelting and processing enterprises, due to the scarcity of quotas, are expected to dominate the profit distribution within the industry chain. This will lead to controllable product quantities, mild price increases, and steady profit growth, achieving high-quality development. There exists a significant cognitive gap in the market regarding this, and it is recommended to focus on the leading global rare earth industry chain group.

China Securities reported that recently, China and the U.S. reached a principled agreement on tariff negotiations, leading to a temporary relaxation of rare earth export controls. Some magnetic material enterprises have obtained export licenses. NdFeB magnetic materials containing medium-heavy rare earths such as dysprosium and terbium are key materials for NEV motors. China controls approximately 70% of global rare earth ore supply, over 90% of smelting and separation capacity, and over 90% of NdFeB magnetic material capacity. Since April, magnetic material exports have declined by more than 50%, leaving overseas NEV raw material inventories critically low, with some enterprises facing production suspension risks. China's rare earth controls are not fully relaxed but only temporarily eased in the civilian sector, allowing the magnetic material sector to maintain high valuation expectations. Under the high restocking demand for overseas rare earth magnetic materials, export recovery implies a convergence in price spreads between domestic and overseas markets, with high overseas prices transmitting to the domestic market, leading to profit recovery for magnetic material enterprises. It is recommended to actively monitor investment opportunities in the rare earth magnetic material sector.