Rare Earth Market Sees Divergent Performance in July, Pr-Nd Oxide Prices Rally and Retreat

The performance of rare earth market varieties diverged markedly in July. Pr-Nd oxide prices followed an overall “rally early on before pulling back, with weakness at month-end” pattern, most directly affected by sentiment driven by negative news. Terbium oxide experienced a reasonable pullback in the second half, but the surge in the first half still lifted its price center. Dysprosium oxide was stable, not following the sharp ups and downs, and remained firm overall.

Early in the month, the rare earth market reversed its prior weakness, experiencing a wave of concentrated upward momentum. The core driver was a top-tier player entering the market to purchase, boosting sentiment, coupled with production cuts and shutdowns at raw ore separation and scrap recycling enterprises making low-priced supplies hard to find, prompting upstream suppliers to hold back from selling and hold prices firm. Pr-Nd oxide, as a bellwether, saw prices quickly rebound from around 743,000-747,000 yuan/mt at the start of the month to briefly touch a range of 765,000-770,000 yuan/mt. Terbium oxide was particularly outstanding; affected by tight supply and purchases from major plants, the largest single-day gain in the first half reached 125,000 yuan/mt.

However, the upward momentum failed to sustain throughout the month. From mid-to-late month, the traditional high-temperature holiday for downstream users led to a marked decline in operating rates at motor plants and end-user magnetic material enterprises. Magnetic material enterprises were less receptive to high-priced raw materials, shifting to purchasing on a rigid demand basis at lower prices, which cooled trading activity. Toward month-end, negative news combined with a sharp decline in Pr-Nd oxide futures dealt a blow, causing spot market sentiment to turn sharply negative; market quoting and inquiry activity was weak, with Pr-Nd oxide traded prices falling below 750,000 yuan/mt.

From the perspective of driving factors, supply-side contraction provided bottom support—production cuts and shutdowns at some raw ore separation and scrap recycling plants tightened spot availability, and upstream players still had the confidence to hold prices firm, limiting the scope for further deep declines. But the demand-side off-season effect capped upside potential; high-temperature holidays caused insufficient downstream operating rates, and magnetic material enterprises purchased based on sales, resulting in a stalemate tug-of-war between upstream and downstream. Meanwhile, sentiment transmission from negative news accelerated fluctuations, triggering a rapid pullback in Pr-Nd oxide prices. On the industry cost front, China Northern Rare Earth and Bao Gang United Steel set the Q3 rare earth concentrates transaction price at 38,565 yuan/mt, down 0.62% QoQ, ending a streak of seven consecutive quarterly increases. Looking ahead to August, the rare earth market is likely to continue its game of push and pull. The supply of rare earth oxides is expected to tighten in the short term, with upstream major producers still holding strong pricing power. Additionally, end-use consumption from NEVs, wind power, and other sectors is expected to see order growth during the traditional peak season in H2. However, August remains a high-temperature off-season, meaning that a noticeable recovery in demand still needs time, and macro uncertainties persist. Mainstream products such as Pr-Nd oxide are expected to consolidate around current levels in the near term, with limited downside room supported by costs. Any rise, however, will need to wait for a substantial recovery in downstream demand and an improvement in macro sentiment.