According to the commodity market analysis system of SunSirs, prices in the domestic heavy rare earth market have been on a downward trend since the beginning of May. Specifically, the prices of dysprosium oxide, ferro-dysprosium alloy, and metallic dysprosium have all declined. As of the 14th, the price of dysprosium oxide stood at 1.35 million RMB/ton—a 4.26% decrease over the past half-month; the price of ferro-dysprosium alloy was 1.33 million RMB/ton—a 3.27% decrease; and the price of metallic dysprosium was 1.90 million RMB/ton—a 1.04% decrease.

Since May, prices in the heavy rare earth market have followed a downward trend. Due to sluggish downstream demand, market activity has gradually cooled, and trading remains cautious. Demand for heavy rare earths continues to be weak, and inventories of dysprosium oxide remain elevated; consequently, most enterprises are quoting prices with caution, instances of low-price concessions are rare, and a strong wait-and-see sentiment prevails across the market.

Downstream Demand Enters Off-Season; Procurement Becomes Extremely Cautious

As the primary downstream sector for permanent magnet materials—with both new energy vehicles and wind power entering their traditional off-seasons—magnet material manufacturers are facing a shortage of orders, causing their operating rates to drop to between 60% and 65%. This situation has led end-users to exert downward pressure on prices; consequently, magnet material factories are adopting a strictly "buy-on-demand" strategy with zero inventory, refusing to accept high prices, which has resulted in a significant contraction in essential demand for heavy rare earths. Furthermore, the decision by some manufacturers of low-to-mid-range magnet materials to reduce their use of dysprosium and terbium additives has further suppressed demand, driving a downward trend in the heavy rare earth market.

Restricted Circulation + Capital Outflows: Market Trading Remains Sluggish

With invoicing quotas for rare earth trading now restricted, transaction costs have risen and circulation efficiency has declined; the market is characterized by a situation where—despite the availability of stock—it is difficult to move inventory, and quoted prices exist in a vacuum with no actual trading taking place. Both traders and magnet manufacturers have adopted a wait-and-see stance; inquiries remain scarce, trading activity is sluggish, and prices are far more prone to falling than rising.

Market outlook

The downward trend in the heavy rare earth market observed in May represents a short-term correction, driven collectively by profit-taking, the seasonal slack in demand, liquidity and financing pressures, and cooling market expectations. In the medium to long term, supply rigidity—coupled with the inelastic demand from the new energy sector—will support an upward shift in the price center; consequently, there remains room for a rebound following this correction.

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