According to the commodity market analysis system of SunSirs, domestic prices for light rare earths have edged down since the beginning of June. On June 10, the SunSirs rare earth index stood at 631 points; this represents a 37.34% decline from the period's peak of 1,007 points (recorded on February 24, 2022) and a 132.84% increase from the period's low of 271 points (recorded on September 13, 2015). (Note: The period spans from December 1, 2011, to the present.)

Since June, domestic prices for neodymium oxide, neodymium metal, praseodymium oxide, praseodymium metal, praseodymium-neodymium alloy, and praseodymium-neodymium oxide have all seen slight declines. As of the 11th, the price of neodymium oxide stood at 775,000 RMB/ton (down 1.27%); neodymium metal at 940,000 RMB/ton (down 0.79%); praseodymium oxide at 767,500 RMB/ton (down 1.27%); praseodymium metal at 935,000 RMB/ton (down 1.06%); praseodymium-neodymium alloy at 835,000 RMB/ton (down 1.18%); and praseodymium-neodymium oxide at 695,000 RMB/ton (down 1.07%).

Since June, prices in the domestic light rare earth market have edged downward; the prices of core products have declined, and market sentiment has trended weaker. This trend is primarily driven by a confluence of bearish factors—including a short-term supply-demand imbalance, further weakening of demand during the off-season, and a marginal easing of supply—keeping the market outlook weak in the near term.

Immediate factor: A traditional off-season compounded by sluggish new orders.

June marks the traditional off-season for the rare earth market; sectors such as new energy vehicles, wind power, and industrial motors have entered a period of significantly reduced activity. Operating rates at magnetic material manufacturers hover between 55% and 60%. Facing price pressure from end-users, these manufacturers are maintaining zero inventory and pricing purchases strictly on an as-needed basis, completely shunning high-priced supplies; consequently, transaction volumes have plummeted. Furthermore, the reduced usage of praseodymium-neodymium (Pr-Nd) and the increased incorporation of recycled materials in low-to-mid-end magnetic products have further dampened demand for virgin Pr-Nd. Entering June, new downstream orders remain limited, and demand in traditional sectors—such as consumer electronics and home appliances—has hit a seasonal low. The market remains under pressure with an unstable foundation for price recovery, and the light rare earth market is trending downward.

Excessive gains previously; recent market performance was weak

From the beginning of the year through late April, light rare earth prices surged, but the market has recently undergone a sustained correction. Following the implementation of the *Regulations on the Administration of Mineral Resources* in early May—a case where the realization of positive news actually triggered a bearish reaction—traders and smelters rushed to offload inventory. A flurry of low-priced sell orders ensued, driving the light rare earth market steadily downward.

Supply-side constraints have eased at the margin, leading to a month-on-month increase in domestic rare earth oxide production

Mining quotas for 2026 have been increased—focusing primarily on light rare earths—while smelting operating rates stand at 85%–90% and inventories continue to accumulate. Additionally, the resumption of ore imports from Myanmar (which has a high light rare earth content) and a 63% year-on-year increase in Q1 praseodymium-neodymium oxide output by the US-based MP Materials have helped bridge the domestic supply gap. Stocks previously withheld from the market due to high prices have flooded in, increasing the volume of circulating spot goods; this shift has disrupted market balance and driven prices down. Domestic production of rare earth oxides has risen across the board, adding to spot supply at a time when downstream demand remains sluggish; this supply-demand mismatch has further suppressed rare earth prices.

Market Outlook

In the short term, the rare earth market faces downward pressure, with prices likely to remain on a declining trend. However, the supply-demand balance is poised to tighten again, driven by growing demand in downstream sectors—such as new energy vehicles, wind power installations, and industrial motors—alongside continued regulatory tightening in the industry, expectations of strategic stockpiling, and a recovery in demand from overseas high-end manufacturing. Meanwhile, as a core raw material for high-tech industries, rare earth retains its long-term growth trajectory against the backdrop of carbon neutrality goals and the upgrading of high-end manufacturing, suggesting a potential for sustained, long-term price appreciation.

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