Pr-Nd Oxide Production Declines 6% MoM, Market Sees Weak Balance Amid Supply Shifts

SMM News on June 30: Rare earth oxide production trended downward MoM this month, with Pr-Nd oxide experiencing the steepest decline—its production contracted by around 6% MoM. The contraction did not stem from fluctuations in the raw ore separation segment but was concentrated in the scrap recycling chain: impacted by tax invoice compliance issues, some scrap recycling enterprises proactively cut or suspended production, directly causing a decline in recycled Pr-Nd oxide output. The share of recycled Pr-Nd oxide in total Pr-Nd oxide production dropped from 44% in May to 37% this month, down 7 percentage points.

Although total supply shrank, the actual contraction was smaller than the market had generally expected, weakening upward momentum for Pr-Nd prices. Coupled with increasingly cautious downstream purchasing sentiment, the market exhibited a “weak balance” in the near term.

In contrast to the fluctuations in the scrap segment, the production pace of raw ore separation enterprises remained generally stable. More notably, some smelting and separation capacity that had not yet been commissioned is planned to officially start up in H2, meaning new capacity will be gradually released. On this basis, even as the recycled segment tightens somewhat for now, total Pr-Nd oxide production in H2 is still expected to be higher than in H1.

Overall, the current production cuts on the scrap side represent a structural and temporary disruption, and their impact has been absorbed by the market, while the steady progress of raw ore separation capacity and the commissioning of new capacity provide a definite support for medium-term supply growth. In the near term, Pr-Nd oxide prices are expected to remain constrained by the reality that the contraction was smaller than expected, moving sideways. Heading into H2, as new production gradually flows into the market, the supply surplus is likely to intensify further, and price trends will then depend more on the strength of end-use demand.