End of Seven Consecutive Increases! Bao Gang United Steel and China Northern Rare Earth's Q3 Rare Earth Concentrates Transaction Price Edged Down QoQ! [SMM Comment]

China Northern Rare Earth announced on the evening of July 9: In accordance with the pricing method for rare earth concentrates and the Q2 2026 rare earth oxide prices, and following calculation and approval at the 14th General Manager’s Office Meeting of the company in 2026, the company’s Q3 2026 rare earth concentrate transaction price was adjusted to a tax-exclusive 38,565 yuan/mt (dry basis, REO=50%), with the tax-exclusive price changing by 771.3 yuan/mt for every 1% increase or decrease in REO.Compared with the Q2 rare earth concentrate transaction price of 38,804 yuan/mt, the price of 38,565 yuan/mt represents a decrease of 239 yuan/mt, a QoQ decline of 0.62%. As learned by SMM, this decline was broadly in line with market expectations.

The Q3 rare earth concentrate transaction price between China Northern Rare Earth and Bao Gang United Steel decreased by 0.62% QoQ

China Northern Rare Earth announced on the evening of July 9: The company convened the 25th Meeting of the 8th Board of Directors on March 14, 2023 and the First Extraordinary General Meeting of 2023 on March 30, 2023, which reviewed and approved the “Proposal on the Pricing Mechanism for Daily Related-Party Transactions of Rare Earth Concentrates and the 2022 Execution and 2023 Estimates”. The company and its related party, Inner Mongolia Bao Gang United Steel Co., Ltd., agreed that starting from April 1, 2023, with the rare earth concentrate pricing formula unchanged, the company’s management would calculate and adjust the rare earth concentrate price within the first ten days of each quarter based on the pricing formula, and re-sign the rare earth concentrate supply contract or supplementary agreement and issue an announcement. For details, please refer to the announcements such as the “Announcement of China Northern Rare Earth on the Pricing Mechanism for Daily Related-Party Transactions of Rare Earth Concentrates and the 2022 Execution and 2023 Estimates” and the “Resolution Announcement of the First Extraordinary General Meeting of China Northern Rare Earth in 2023” published on China Securities Journal, Shanghai Securities News, Securities Times, and the website of the Shanghai Stock Exchange on March 15, 2023 and March 31, 2023, respectively. In accordance with the pricing method for rare earth concentrates and the Q2 2026 rare earth oxide prices, and following calculation and approval at the 14th General Manager’s Office Meeting of the company in 2026, the company’s Q3 2026 rare earth concentrate transaction price was adjusted to a tax-exclusive 38,565 yuan/mt (dry basis, REO=50%), with the tax-exclusive price changing by 771.3 yuan/mt for every 1% increase or decrease in REO.Compared with the Q2 rare earth concentrate transaction price of 38,804 yuan/mt, the price of 38,565 yuan/mt represents a decrease of 239 yuan/mt, a QoQ decline of 0.62%.

China Northern Rare Earth announced on the evening of April 10: In accordance with the pricing method for rare earth concentrates and the Q1 2026 rare earth oxide prices, and following calculation and approval at the 6th General Manager’s Office Meeting of the company in 2026, the Q2 2026 rare earth concentrate transaction price was adjusted to a tax-exclusive 38,804 yuan/mt (dry basis, REO=50%), with the tax-exclusive price changing by 776.08 yuan/mt for every 1% increase or decrease in REO. 38,804 yuan/mt, compared with the rare earth concentrate transaction price of 26,834 yuan/mt in Q1 this year, rose 11,970 yuan/mt, a QoQ increase of 44.61%.

China Northern Rare Earth's announcement on the evening of January 9 showed: According to the rare earth concentrate pricing method and rare earth oxide prices in Q4 2025, after calculation and approval by the company’s first general manager office meeting in 2026, the rare earth concentrate transaction price for Q1 2026 was adjusted to 26,834 yuan/mt (dry basis, REO=50%), excluding tax, and the tax-excluded price will increase or decrease by 536.68 yuan/mt for every 1% change in REO. 26,834 yuan/mt, compared with the rare earth concentrate transaction price of 26,205 yuan/mt in Q4 2025, rose 629 yuan/mt, a QoQ increase of 2.4%.

The rare earth concentrate transaction price of Bao Gang United Steel and China Northern Rare Earth in Q3 edged down QoQ, ending a streak of seven consecutive quarterly increases since Q4 2024! In Q4 2024, the rare earth concentrate transaction price between Bao Gang United Steel and China Northern Rare Earth rose 6.22% QoQ. In Q1 2025, it rose 4.7% QoQ; in Q2 2025, it rose 1.11% QoQ; in Q3 2025, it rose 1.5% QoQ; and in Q4 2025, it rose 37.13% QoQ. In Q1 2026, it rose 2.4% QoQ; in Q2 2026, it rose 44.61% QoQ; but in Q3 2026, it fell 0.62% QoQ.

The slight QoQ decline in the average Pr-Nd oxide price in Q2 drove the QoQ edge down in the rare earth concentrate transaction price in Q3.

As stated in China Northern Rare Earth's announcement, according to the rare earth concentrate pricing method and rare earth oxide prices in Q2 2026, after calculation and approval by the company’s 14th general manager office meeting in 2026, the company's rare earth concentrate transaction price for Q3 2026 was adjusted to 38,565 yuan/mt (dry basis, REO=50%), excluding tax, and the tax-excluded price will increase or decrease by 771.30 yuan/mt for every 1% change in REO.

In Q2, the average quarterly price of Pr-Nd oxide edged down. The average price of Pr-Nd oxide on June 30 was 742,500 yuan/mt, up 21,000 yuan/mt from 721,500 yuan/mt on March 31, a Q2 increase of 2.91%. However, the quarterly average price of Pr-Nd oxide in Q2 this year was 735,466.67 yuan/mt, down 10,488.69 yuan/mt QoQ from the Q1 average of 745,955.36 yuan/mt, a QoQ decline of 1.41%. Given that the quarterly average price of Pr-Nd oxide in Q2 declined by 1.41% QoQ compared to Q1, the Q3 rare earth concentrates price of China Northern Rare Earth and Bao Gang United Steel falling 0.62% QoQ is relatively in line with market expectations.

Currently, the price of Pr-Nd oxide remains stable. According to SMM quotes, the average price of Pr-Nd oxide on July 9 was 764,000 yuan/mt, flat compared to the previous trading day. Recently, inquiry activity in the Pr-Nd oxide market has decreased, and the overall trading atmosphere is somewhat sluggish. Against this backdrop, the offers of oxide suppliers showed a slight decline compared to the afternoon of the 8th; however, due to the still-existing bullish sentiment in the market, the decline is limited, and prices are basically flat compared to the morning of the 8th. In the metal market, as oxide prices fluctuated little, the offers of metal suppliers also did not see significant adjustments, and overall prices also remained stable. However, overall market inquiry activity decreased compared to the 8th, and downstream magnetic material enterprises adopted a more wait-and-see attitude in procurement. In the short term, supported by the bullish sentiment in the market, Pr-Nd product prices are likely to show a trend of drifting higher.

In the medium to long term, entering Q3, as the rare earth industry gradually moves out of the traditional off-season, market confidence in demand during the traditional peak season will also provide some support to rare earth prices. Going forward, attention should be paid to the pace of demand recovery leading to changes in market restocking, as well as changes in macro sentiment!