SunSirs: Supported by Positive Factors, the Heavy Rare Earth Market Was Trending Upward

Price trend

According to the commodity market analysis system of SunSirs, the domestic market price for heavy rare earths has trended upward since the beginning of June, with prices rising for dysprosium oxide, dysprosium-iron alloy, and dysprosium metal. As of the 17th, the price of dysprosium oxide stood at 1.415 million RMB/ton (up 10.98%); dysprosium-iron alloy was priced at 1.37 million RMB/ton (up 10.93%); and dysprosium metal was priced at 1.945 million RMB/ton (up 9.53%).

Market analysis

Since June, prices in the heavy rare earth market have trended upward; driven by rising end-user demand, market activity has gradually increased, and trading conditions have improved. Furthermore, the strategic importance of rare earths has risen and pricing dynamics have been reshaped, leading to fewer instances of low-price discounting and an overall improvement in market conditions.

Supply Side: A "Perfect Storm" of Multiple Contractions

Myanmar is the most critical global source of heavy rare earths, accounting for approximately 57% of China's total rare earth imports. Since 2026, the volume of rare earth imports from Myanmar has plummeted by 42% year-on-year. Restrictions on customs clearance at certain border crossings have directly severed the supply of key medium-to-heavy rare earth raw materials. Concurrently, Vietnam enacted legislation banning the export of raw rare earth ore, further cutting off external supply channels. The second batch of rare earth mining quotas for 2026 saw a sharp 19% year-on-year decline compared to the second batch of 2025, marking a shift from growth to contraction; mining quotas for medium-to-heavy rare earths have remained stagnant for years. Furthermore, while the market had anticipated that recycled rare earths would boost supply, some recycling enterprises faced sluggish sales—or were even forced to curtail or halt production—because they could not obtain complete, valid documentation for their scrap sources; consequently, the supply of recycled rare earths failed to increase as expected, driving up heavy rare earth prices.

Policy Front: Strategic Status Elevated, Pricing Logic Reshaped

On June 15, the *Regulations on the Implementation of the Mineral Resources Law of the People's Republic of China* officially came into effect. Rare earths—along with 36 other key minerals such as tungsten, lithium, cobalt, gallium, and germanium—were formally included in the national catalog of strategic mineral resources. This marks a shift in rare earth pricing from a cyclical commodity model to one driven by "strategic resource status and policy constraints," with national policies providing a boost to the domestic rare earth market.

Demand Side: A Dual Boost from AI and New Energy

Dysprosium oxide is a core raw material for Multi-Layer Ceramic Capacitors (MLCCs). Estimates indicate that by 2027, the demand for MLCCs in AI servers and automotive applications will generate an additional 1,500 tons of dysprosium demand; meanwhile, global annual supply stands at only about 3,500 tons, with 90% of production capacity controlled by China. Murata, a Japanese MLCC giant, holds only 30 days' worth of dysprosium inventory, making a production halt between July and August highly probable. A supply-demand gap has just opened up, creating significant price elasticity. With the penetration rate of new energy vehicles surpassing 55% and rigid growth in demand for permanent magnet motors—coupled with policy-driven upgrades to energy efficiency standards for wind power and industrial motors—the adoption of rare-earth permanent magnet motors continues to rise; this strengthening demand is driving up market prices for heavy rare earths.

Market Outlook

From 2026 onwards, the global supply-demand gap for rare earths is likely to continue widening, with prices poised for steady gains; furthermore, heavy rare earth prices are showing a clear upward trend from their lows, with the price baseline steadily rising.

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