According to the commodity market analysis system of SunSirs, domestic prices for light rare earths trended upward this week. On July 2, the SunSirs rare earth index stood at 663 points; this represents a 34.16% decline from the period's peak of 1,007 points (recorded on February 24, 2022) and a 144.65% 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.)

Domestic prices for neodymium oxide, neodymium metal, praseodymium oxide, praseodymium metal, praseodymium-neodymium alloy, and praseodymium-neodymium oxide all rose this week. By the end of the week, the price of neodymium oxide stood at 817,500 RMB/ton (up 3.15%); neodymium metal at 990,000 RMB/ton (up 1.54%); praseodymium oxide at 807,500 RMB/ton (up 1.89%); praseodymium metal at 9,390,000 RMB/ton (up 2.59%); praseodymium-neodymium alloy at 907,500 RMB/ton (up 2.25%); and praseodymium-neodymium oxide at 760,000 RMB/ton (up 4.47%).

Domestic prices for light rare earths rose this week, with key products trending upward. This rally is the result of a convergence of three factors: a rigid tightening of supply, ongoing policy catalysts, and the onset of peak-season demand expectations.

I. Supply Side: A Dual Contraction Driven by Plummeting Imports and Reduced Recycling Output

Myanmar is a key source of rare earth imports for my country; however, in May 2026, China’s imports of rare earth oxides (REO) from Myanmar plunged by 72% year-on-year and fell by 54% month-on-month. Overall, my country’s rare earth ore imports in May totaled 6,458.2 tonnes, down 44.4% year-on-year and 23.8% month-on-month. Driven by stricter tax policies, the operating rates of rare earth waste recycling enterprises dropped sharply, resulting in a 19.5% month-on-month decline in recycled oxide production in June 2026. Compounded by this dual contraction in imports and recycling, domestic production of praseodymium-neodymium (Pr-Nd) oxide fell by 31% year-on-year in May, with a cumulative year-to-date decline of 18%; consequently, market prices for light rare earths trended upward.

II. Policy Front: Strategic Upgrading and Intensified Export Controls

On June 15, the *Regulations on the Implementation of the Mineral Resources Law* officially came into effect, formally designating rare earths as national strategic mineral resources. Concurrently, the national total quota for rare earth mining for 2026 saw only a modest 5% increase, with limited growth in quotas for light rare earth mining; the second batch of mining quotas was reduced year-on-year, with a significant cut to quotas for rock-hosted rare earth mining. On June 22, the Ministry of Commerce issued an announcement adding ten overseas entities—including two leading U.S. rare earth companies—to the export control list for dual-use items. The continued tightening of export controls has compelled overseas customers to increase procurement from domestic sources; this combined pressure from both domestic and international demand has further exacerbated the tight supply of domestic spot goods, driving up market prices.

III. Demand Side: Peak Season Expectations and Concentrated Volume Growth Across Multiple Sectors

The second half of the year marks the peak season for production and sales in sectors such as automobiles and industrial robots, with the procurement of raw materials for magnetic materials typically commencing around July. As the quarter draws to a close, magnetic material manufacturers ramp up monthly raw material tenders, leading to a surge in market orders. Furthermore, from January to May 2026, China’s cumulative exports of rare-earth magnetic materials rose by 16% year-on-year; cumulative production of new energy vehicles increased by 2.5%, and industrial robot output grew by 47.8%. Emerging sectors—such as wind power and humanoid robotics—are also driving sustained growth in the consumption of high-end permanent magnet materials; this rising downstream demand is underpinning the upward trend in light rare earth prices.

In the short term, the rare earth market is poised to rise rather than fall; global and domestic supply-demand dynamics for praseodymium-neodymium oxide are expected to remain tight over the medium to long term, likely driving a gradual upward shift in the price baseline. Driven by growing demand in downstream sectors—such as new energy vehicles, wind power installations, and industrial motors—alongside tightened industry regulation, anticipated strategic stockpiling, and a recovery in overseas demand for high-end manufacturing, the supply-demand balance is expected to tighten once again. Furthermore, as a core raw material for high-tech industries, rare earth retains its long-term growth trajectory amidst the push for carbon neutrality and the upgrading of high-end manufacturing, suggesting a sustained, trend-driven strengthening of the market.

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