Driven by expanding demand and supply constraints, rare earth prices are poised for sustained growth.

On the evening of January 9, China's two major rare earth giants, Northern Rare Earth and Baotou Steel, simultaneously announced increases in rare earth concentrate trading prices for the first quarter of 2026. This marks the sixth consecutive price hike since the third quarter of 2024.

High-end rare earth product prices have surged over 10% since the start of the year

The price hikes by these two giants merely reflect broader upward price fluctuations in the rare earth market. Industry observers note that their decisions to raise rare earth concentrate prices were also influenced by market volatility. As a critical strategic resource, the rare earth industry is undergoing structural transformation. Global sales and penetration rates of new energy vehicles are steadily increasing, while sectors like wind power, humanoid robotics, and defense applications all exhibit robust demand for rare earth materials. Recently, the Ministry of Commerce announced strengthened export controls on dual-use items to Japan. Amid these heightened restrictions, the strategic importance of rare earths has been further highlighted.

In recent years, the upstream rare earth sector has undergone consolidation, enhancing industry concentration domestically. Quotas for rare earth mining and smelting separation have also been steadily released. On the downstream demand side, domestic neodymium-iron-boron permanent magnet production surpassed 300,000 tons annually while maintaining high growth rates. This trend is expected to further drive rare earth demand, supporting overall stable yet upward price momentum.

Driven by dual pressures of expanding demand and supply constraints, rare earth prices possess sustainable upward momentum. According to data released by the China Rare Earth Industry Association, as of January 16, 2026, the Rare Earth Price Index reached 239, marking an increase of over 10% compared to the end of 2025. On January 15, the index hit 240.9, its highest level since March 14, 2023, representing a rise of more than 55% from its low point of 153.3 on July 22, 2024.

Regarding fluctuations in ex-factory prices for mid-to-high-end rare earth products, data indicates that as of January 16, 2026, domestic ex-factory prices reached: and praseodymium-neodymium oxide at RMB682,500 per ton. All three reached their highest levels since March 2023, with praseodymium oxide and praseodymium-neodymium oxide hitting their second-highest levels since that month.

Looking at the longer term, rare earth prices have surged significantly since 2025. In 2025, the ex-factory prices of these three mid-to-high-end rare earth products all rose by over 35%. Since the start of this year, their ex-factory prices have continued to climb, each increasing by more than 10%, with praseodymium oxide's ex-factory price rising over 13%.

Global Rare Earth Supply-Demand Gap Expected to Widen

Due to early technological limitations, rare earths were mistakenly believed to be scarce. In reality, their total reserves in the Earth's crust are relatively substantial. Data from 2024 shows China leads globally with reserves of 44 million tons, while other nations also possess considerable rare earth resources. China's true advantage lies in its smelting separation and deep processing capabilities.

According to the Ministry of Industry and Information Technology (MIIT), China's rare earth mining output reached 255,000 tons in 2023, with smelting and separation production at 244,000 tons. Projections indicate domestic mining output will rise to 521,000 tons and smelting/separation production to 519,000 tons by 2030. Globally, total rare earth supply is forecast to reach 681,000 tons by 2030. CITIC Securities further indicates that robust consumption growth in new energy vehicles, robotics, industrial motors, and other sectors is expected to drive rapid expansion in rare earth demand. This tightening supply-demand balance will provide long-term support for rare earth prices. Global demand is projected to reach 821,000 metric tons by 2030, creating a 140,000-metric-ton supply gap compared to projected supply levels. This deficit is anticipated to widen significantly from the estimated 10,000-metric-ton gap projected for 2025.

As the third-generation permanent magnet material, neodymium-iron-boron (NdFeB) rare earth permanent magnets currently offer the best magnetic properties and optimal comprehensive performance. New energy vehicles represent the most significant driver of high-performance NdFeB material demand, projected to account for approximately 50% of future demand. CSC Securities indicates that global new energy vehicle production is projected to exceed 26 million units by 2026, corresponding to a demand for neodymium-iron-boron permanent magnets reaching 66,000 metric tons. Total demand for neodymium-iron-boron magnets in the automotive sector will approach 80,000 metric tons. Concurrently, global demand for high-performance NIBO materials across sectors including automotive, industrial motors, wind power generation, industrial robots, humanoid robots, energy-efficient elevators, variable-frequency air conditioners, and consumer goods is projected to reach 188,000 metric tons by 2026. This represents an anticipated increase of over 80% compared to the 2022 demand of 102,000 metric tons.

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