Supply and Demand Both Decline, Rare Earth Prices May Continue To Fluctuate Rangebound【SMM Analysis】

Chile has released its National Critical Minerals Strategy, clearly positioning itself as a stable supplier of minerals. Currently, driven by artificial intelligence, the development of new technologies, and the energy transition, global demand for these critical minerals continues to grow. The announcement of this strategy holds particular significance in the weeks before President Boric leaves office, highlighting Chile’s intention to transition from over-reliance on the copper industry toward adapting to a decarbonized economy and achieving resource diversification. Chile has identified 14 critical minerals, specifically covering copper, lithium, molybdenum, rhenium, cobalt, rare earths, antimony, selenium, tellurium, gold, silver, iron ore, boron, and iodine. Based on Chile’s current position in the global market, these 14 minerals are categorized into three groups: The first category includes copper, lithium, molybdenum, and rhenium. Their respective shares in global supply are 23%, 20.4%, 14.6%, and 46.8%, and other major economies have also designated these minerals as critical. The second category consists of minerals that are currently not produced or only produced in small quantities, including cobalt, rare earths, antimony, selenium, and tellurium. The third category comprises minerals already produced domestically in Chile with the potential to expand their role in the global value chain, such as gold, silver, iron ore, boron, and iodine.

This week, overseas prices continued to rise due to multiple factors, and shipments tightened further. Key developments emerged in raw ore mining across the US, Asia, and Latin America. The US government strengthened domestic rare earth capacity through large-scale funding, a Malaysia-France cooperation project achieved substantial progress, Brazil formulated a national rare earth strategy to unlock resource potential, and India considered adjustments to mining policies to enhance extraction efficiency. These measures collectively reflect countries' heightened focus on rare earth supply chain security, though technological, cost, and capacity bottlenecks remain widespread challenges.

Two informed sources revealed that to accelerate mining production, India is considering tightening its mineral rights auction policy to exclude mining enterprises that fail to apply for mining permits long after winning the auction. Official data show that since 2015, the Indian government has auctioned 594 mineral blocks, of which only 82 are in production, accounting for less than 14%. Sources said an internal government audit found that over the past five years, about 50 enterprises had not commenced mining after acquiring blocks, with some even failing to apply for mining permits. The two informed sources declined to be named as they were not authorized to speak. The Indian Ministry of Mines also did not respond to an email request for comment.