SunSirs: The Rare Earth Market Halted Its Decline and Turned Stronger, and Will be Volatile with an Upward Bias in the Short Term

Status of the Rare Earth Spot Market

Last week, the rare earth market exhibited a trend of stabilizing after a decline, shifting toward strength, and trending upward amidst product differentiation. Prices for mainstream products transitioned from narrow fluctuations at the start of the week to a gradually firmer trajectory, and overall market sentiment showed a marked improvement compared to the previous week. On the upstream side, driven by a substantial upward adjustment in rare earth concentrate prices, separation enterprises and holders of inventory displayed a strong inclination to hold firm on prices and withhold supply; consequently, the availability of low-priced goods in the market continued to tighten, and supply-side support strengthened significantly. On the downstream side, restocking driven by the rigid demand of magnetic material manufacturers stimulated a modest uptick in inquiries and transaction volumes; however, constrained by sluggish follow-through on new orders from end-users, acceptance of high-priced raw materials remained limited. Overall, the market remained locked in a standoff characterized by tight supply and cautious demand. In terms of specific product performance, the Pr-Nd series emerged as the market's core leading segment, with prices rising continuously throughout the week and the magnitude of gains gradually expanding. The Dy-Tb series maintained a weak yet stable trajectory, experiencing only minor price fluctuations and light trading activity. Light rare earth varieties—such as Lanthanum and Cerium—saw steady trading; while their movements were only marginally influenced by the mainstream market trend, they generally exhibited characteristics of rising prices accompanied by subdued trading volumes, trending upward amidst fluctuations.

Last week (April 13–17), price trends for mainstream products in the rare earth market showed a distinct divergence: prices for praseodymium-neodymium series products saw three consecutive days of upward adjustments, with the magnitude of gains steadily widening, while dysprosium-terbium series products experienced minor fluctuations and trended slightly downward. Specifically, the price of praseodymium-neodymium oxide rose from 756,200 RMB/ton to 776,000 RMB/ton, marking a cumulative increase of 19,800 RMB/ton over the week; praseodymium-neodymium metal rose from 920,200 RMB/ton to 942,300 RMB/ton, with a cumulative weekly increase of 22,100 RMB/ton. Meanwhile, dysprosium oxide fluctuated slightly during the week, recording a cumulative decline of 900 RMB/ton to reach 1,368,100 RMB/ton; terbium oxide continued to weaken, falling by a cumulative 1,400 RMB/ton to 6,075,700 RMB/ton. Furthermore, for products such as praseodymium oxide, neodymium oxide, europium oxide, lanthanum-cerium oxide, and neodymium metal, transaction activity remained sparse throughout the week; consequently, market quotes offered limited reference value, and the overall trading atmosphere remained subdued.

Last week, the supply-demand landscape in the rare earth market tightened further compared to the previous week. On the supply side, cost support and a reluctance to sell reinforced one another; on the demand side, essential restocking showed marginal improvement, yet weakness in end-user sectors constrained upward momentum. Overall, the market exhibited three core characteristics: tight supply, weak demand, and divergence across different product categories. Regarding supply, on April 10, both Northern Rare Earth and Baogang Rare Earth announced—in tandem—an upward adjustment to the price of rare earth concentrates for the second quarter of 2026, raising it to 38,804 RMB/ton. This represented a month-over-month increase of 44.61%, marking the largest single-quarter surge since the pricing mechanism reform of 2023. This factor was compounded by several others: the first batch of domestic rare earth mining quotas for 2026 saw only a marginal 2% increase (while smelting and separation quotas remained flat); supplies of medium-to-heavy rare earths from Myanmar continued to be disrupted; and Vietnam maintained its ban on the export of raw ores. Consequently, raw material costs rose sharply, passively driving up production costs for separation enterprises. Holders of inventory generally became reluctant to sell, opting instead to hold out for higher prices; as a result, the volume of spot market circulation remained consistently low, and low-priced supplies tightened rapidly. The supply shortage was particularly acute within the Pr-Nd (praseodymium-neodymium) series, which emerged as the primary driver behind the current round of price increases. On the demand side, downstream magnetic material manufacturers adopted a wait-and-see attitude early in the week, exhibiting low tolerance for high prices. By mid-week, however—as existing raw material inventories continued to deplete—essential restocking needs spurred a noticeable increase in inquiries and a slight uptick in transaction volumes, thereby providing effective support for Pr-Nd prices. Nevertheless, a time lag in order transmission from end-user sectors—such as new energy vehicles and wind power—meant that follow-up orders for magnetic materials remained sluggish. Manufacturers displayed significant resistance to high-priced raw materials, limiting their purchasing activities primarily to maintaining minimum inventory levels and ensuring essential production continuity; no instances of concentrated, large-scale restocking were observed. Demand diverged significantly across different product categories: the Pr-Nd series saw relatively active trading, bolstered by essential demand from sectors such as new energy vehicles, industrial motors, and humanoid robots; conversely, demand for the Dy-Tb (dysprosium-terbium) series failed to show any significant volume growth, with market activity remaining limited to sporadic, essential transactions, resulting in a continued lackluster overall performance. Overall, market trends this week were dominated by tightening supply. Rising costs and a reluctance to sell collectively drove prices upward; however, sluggish end-user demand served as a significant constraint, resulting in a relatively moderate pace of price appreciation and a lack of broad-based growth in trading volume. Consequently, the dynamic interplay between supply and demand intensified further compared to two weeks ago.

Industry News

1. On April 9, the Ministry of Commerce officially announced that, based on the consensus reached during the China-U.S. economic and trade consultations in Kuala Lumpur, the rare earth export control measures—originally promulgated on October 9, 2025—will be suspended until November 10, 2026. Both China and the United States will maintain ongoing communication regarding their respective concerns through established economic and trade consultation mechanisms. This policy adjustment is expected to help stabilize the global rare earth supply chain and alleviate inventory and cash flow pressures on domestic enterprises.

2. On the evening of April 10, Northern Rare Earth and Baogang Rare Earth jointly announced an upward adjustment to the trading price of rare earth concentrates for the second quarter of 2026. This marked a sequential increase of 44.61% and initiated the seventh consecutive quarter of price hikes since the fourth quarter of 2024; this substantial rise in input costs provides strong support for the prices of rare earth oxides.

3. In the first quarter, Northern Rare Earth firmly anchored itself to the goal of high-quality development, concentrating its efforts on key initiatives across the sectors of rare earth raw materials, functional materials, and downstream applications. By optimizing operational strategies, coordinating resource integration, and accelerating technological breakthroughs, the Group fully leveraged the advantages of its integrated production system. Consequently, all major operating indicators posted strong positive growth; the company is projected to achieve a net profit attributable to owners of the parent company ranging from RMB 900 million to RMB 940 million—a substantial year-on-year increase of 109.14% to 118.43%—thereby securing a robust "flying start" to the year.

4. In the first quarter of 2026, domestic sales of new energy vehicles rose by 42.8% year-on-year, while newly installed wind power capacity increased by 37%; demand across these two core downstream sectors remained consistently robust, providing solid long-term demand support for rare earth permanent magnets and Pr-Nd series products.

5. A research report by CITIC Securities projects that, starting in 2026, the global supply-demand gap for rare earths will continue to widen—specifically, the deficit for praseodymium-neodymium oxide is expected to increase year by year. Consequently, the central price level for rare earths is poised to rise steadily, while emerging sectors such as new energy vehicles, humanoid robots, and the "low-altitude economy" are set to become the core drivers of long-term growth in rare earth demand.

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