Abstract

Affected by the Spring Festival holiday and the pace of resumption of work after the holiday, the rare earth market spot supply was tight in February, downstream inventories remained low, and enterprises were reluctant to sell raw materials, generally showing a pattern of "stable prices and stockpiling before the holiday, and stronger prices after the holiday." The state implements strict total quantity control indicators for rare earth ore mining, smelting and separation, and upstream enterprises organize production according to the approved indicators, resulting in a continued tight supply of raw materials. After the Spring Festival holiday ended in late February, export controls on rare earths to Japan were upgraded, further strengthening supply constraints, increasing market bullish sentiment, and driving up prices of mainstream products, continuing the tight balance in the industry.

Market Overview

In February, the rare earth market was affected by the Spring Festival holiday and the pace of resumption of work, showing a pattern of concentrated pre-holiday stockpiling and post-holiday price increases, but cautious transactions, with a tight supply of raw materials throughout the month. Currently, the country strictly implements the total control policy for rare earth mining and smelting separation. Both raw ore mining and smelting separation enterprises must operate in compliance with regulations within the approved quotas, and production exceeding the quotas is prohibited. The overall supply of the industry is rigidly constrained, becoming the core factor supporting the price increase.

Market activity was relatively high ahead of the Spring Festival, especially among large magnetic material companies, which significantly increased their procurement volume as they replenished their inventories to ensure the supply of raw materials for post-holiday production. In early February, Premier Li Qiang inspected the rare earth industry in Ganzhou, Jiangxi Province, visiting companies and institutions such as Ganzhou Fulte Electronics and the Ganjiang Innovation Research Institute of the Chinese Academy of Sciences. He emphasized the need to coordinate resource development, strengthen technological breakthroughs, and promote green and intensive development, further clarifying the strategic positioning and development direction of the rare earth industry. On the first trading day after the holiday, while prices for mainstream products generally increased, magnetic material companies had already completed concentrated stockpiling before the holiday, temporarily depleting some rigid demand. Coupled with downstream companies' caution regarding the current high raw material prices, the market was largely in a wait-and-see mode. Although the new export restrictions to Japan issued on February 24th further strengthened expectations of tighter supply, the market initially focused on inquiries and price assessments, with small-scale transactions and on-demand purchases remaining the main focus, resulting in overall weak trading.

The work resumption status after the Spring Festival

Due to the Spring Festival holiday, most domestic rare earth smelting and separation, metal processing, and magnetic material production enterprises suspended production and closed for the holidays in the first half of February, with the operating rate at a low level for the year. In the latter half of the month (starting from February 24), various rare earth groups and mainstream enterprises resumed operations one after another, but the supply side remained rigidly tight.

As of the 28th, the post-holiday operating rate of ore smelting and separation enterprises was generally 70%-75%, with some enterprises temporarily slowing down their operations due to total quota control factors. Waste recycling and separation enterprises, not subject to ore quota restrictions, had a more flexible resumption schedule, with a post-holiday operating rate reaching 80%-85%. However, due to constraints on waste raw material sources, the overall supply increase was limited. Metal production enterprises, affected by tight raw material supply, mainly operated on an as-needed basis, with a post-holiday operating rate of approximately 75%-80%. The operating rate of large-scale magnetic material processing enterprises was approximately 80%-85%, while small and medium-sized factories gradually resumed production and began purchasing only what they needed, but remained somewhat hesitant to purchase due to high prices.

Changes in the market prices of mainstream products

The average monthly price of praseodymium oxide was 731,500-886,100 RMB/ton, an increase of 21.13%; the average monthly price of praseodymium metal was 885,500-1,082,500 RMB/ton, an increase of 22.25%; the average monthly price of dysprosium oxide was 1,393,000-1,616,000 RMB/ton, an increase of 16%; the average monthly price of terbium oxide was 6,116,200-6,494,500 RMB/ton, an increase of 6.19%; the average monthly price of gadolinium oxide was 200,700-261,500 RMB/ton, an increase of 30.29%; the average monthly price of holmium oxide was  535,000-562,800 RMB/ton, an increase of 5.2%; and the average monthly price of cerium oxide was  12,000-12,900 RMB/ton, an increase of 7.5%.

Policy and industry information

1. On February 10, Premier Li Qiang of the State Council visited rare earth enterprises and research institutions in Ganzhou, Jiangxi Province, emphasizing the need for rational resource development, adherence to green development, and the creation of a rare earth science and technology innovation hub.

2. On February 23, the full text of the "Interim Measures for the Total Control and Management of Rare Earth Mining and Rare Earth Smelting and Separation" (Order No. 71 of the Ministry of Industry and Information Technology and other three ministries) was published, clarifying the requirements for total control and product traceability management.

3. On February 24, the Ministry of Commerce strengthened export controls on rare earth-related items, and implemented strict reviews and export restrictions on Japanese military and high-end manufacturing companies. The control of medium and heavy rare earths was comprehensively upgraded, with stricter approval processes and tighter traceability, resulting in a significant decrease in rare earth exports to Japan.

Market outlook

In March, production and operations across the industrial chain returned to normal, and demand-driven procurement at the application end is expected to gradually increase, leading to improved market activity. On the raw material side, four factors—constraints on quotas, limited overseas supply, overall tight global supply, and export controls to Japan—are converging, resulting in tight supply and prices more likely to rise than fall. Currently, new energy and high-end manufacturing are providing strong support, coupled with the trend of large-scale AI technology application showcased at the 2026 CCTV Spring Festival Gala, which is expected to further release restocking demand at the application end. It is anticipated that light rare earths will fluctuate at high levels, while medium and heavy rare earths will continue to see price increases, with a tight market balance expected throughout the first quarter, and the price center likely to maintain an upward trend.

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