According to Securities Times, rare earth prices have continued to climb since January, with yttrium oxide, praseodymium oxide, and neodymium oxide showing particularly significant increases. Both neodymium oxide and praseodymium oxide prices have risen by over CNY120,000 per ton.

According to data from the Baotou Rare Earth Product Exchange, as of January 28, the average price of yttrium oxide stood at CNY 77,000 per ton, up 33.46% from the end of last year. The average price of neodymium oxide reached CNY 732,500 per ton, a 20.08% increase from year-end, while praseodymium oxide averaged CNY 733,300 per ton, marking a cumulative 19.92% rise.

Prices for other rare earth varieties, including gadolinium oxide, neodymium metal, praseodymium-neodymium metal, and praseodymium-neodymium oxide, all rose by over 10%.

This month, China's two major rare earth giants, Northern Rare Earth and Baotou Steel, both announced price hikes for rare earth concentrate transactions in the first quarter of 2026. This marks the sixth consecutive price increase since the third quarter of 2024, driving an industry-wide upward price trend.

On the supply side, global rare earth supply faces multiple constraints. China holds the world's largest reserves and production capacity of rare earths, yet its annual mining quota growth remains low. Quotas for medium and heavy rare earths have remained stable for an extended period. Combined with low inventory levels, this has amplified price volatility. Internationally, political instability in Myanmar has led to tightening rare earth exports, while Vietnam has revised its laws to ban exports of rare earth ore. These factors collectively exacerbate global supply constraints, particularly for medium and heavy rare earth varieties.

According to the U.S. Geological Survey, global rare earth ore production in 2024 reached 390,000 tons, with China accounting for 270,000 tons—69% of the global total. At the quota level, the annual rare earth mining quota for 2024 was set at 270,000 tons, representing a 5.9% year-on-year increase. However, this growth rate slowed by 15.5 percentage points compared to the previous year, continuing the trend of decelerating quota expansion.

Emerging Sectors Drive Explosive Rare Earth Demand

As a non-renewable strategic resource, rare earths are hailed as the “vitamins” of modern industry. They serve as indispensable key materials for developing high-tech fields such as new energy, new materials, energy conservation and environmental protection, aerospace, and electronic information. Rare earths provide multifaceted foundational material support for green energy, high-end manufacturing, and defense technology, closely intertwined with key industries including next-generation information technology, high-end CNC machine tools, robotics, and aerospace.

Currently, demand for rare earths as critical functional materials is surging alongside the rise of humanoid robots and the low-altitude economy. For humanoid robots, joint motors require rapid response, high starting torque, and precise control. High-performance neodymium-iron-boron permanent magnets, with their superior magnetic properties and stability, have become the core material choice to meet these demands.

In the low-altitude economy, electric vertical takeoff and landing (eVTOL) aircraft and drones impose higher demands on propulsion systems—requiring powerful output while maintaining lightweight and high energy efficiency. The adoption of rare earth permanent magnet motors can significantly enhance system efficiency, reduce overall structural weight, and effectively extend endurance.

Emerging sectors (humanoid robots and low-altitude economy) are projected to increase neodymium-iron-boron demand to 33,000 metric tons by 2035, accounting for 5.5% of total demand, with this share expected to rise to 7.6% by 2040.

The strategic importance of global rare earth resources continues to rise, ushering the rare earth industry into a new era of high-quality development. With quota controls and regulatory policies in place, the rigid logic of supply constraints may persist. It is projected that starting in 2026, the global rare earth supply-demand gap may widen continuously, prices may remain stable with upward momentum, and the profitability of the industrial chain may continue to improve. We maintain our recommendation for strategic allocation value in the rare earth industrial chain.

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