Recently, the domestic light rare earth market prices have significantly decreased. On May 20th, the Shengyi Society Rare Earth Index was 630 points, a decrease of 12 points from yesterday, a decrease of 37.44% from the highest point of 1007 points during the cycle (2022-02-24), and an increase of 132.47% from the lowest point of 271 points on September 13, 2015. (Note: The cycle refers to the period from December 1, 2011 to present)
Domestic prices of neodymium oxide, metallic neodymium, praseodymium oxide, metallic praseodymium, praseodymium neodymium alloy, and praseodymium neodymium oxide have all declined. As of the 20th, the price of neodymium oxide was 770000 yuan/ton, with a mid month price decline of 8.33%; The price of neodymium metal is 950000 yuan/ton, with a mid month price decline of 7.77%; The price of praseodymium oxide is 765000 yuan/ton, with a mid month price decline of 8.11%; The price of praseodymium metal is 935000 yuan/ton, with a mid month price trend of 7.88% decline; The price of praseodymium neodymium alloy is 855000 yuan/ton, with a mid month price decline of 8.06%; The price of praseodymium neodymium oxide was 695000 yuan/ton, with a mid month price decline of 8.55%.
Recently, the prices of light rare earths in the domestic market have significantly decreased, with core product prices continuing to decline, and the trend of market atmosphere weakening. The core is the large increase in the early stage, weaker demand during the off-season, relaxed supply margin, resonance of negative factors, and significant short-term market decline.
1、 Direct factor: Downstream demand is weaker during the off-season, and rigid demand is collapsing
New energy vehicles, wind power, and industrial motors have entered a deep off-season, with magnetic material companies operating at a rate of 55% -60%. Terminal prices are being suppressed, and magnetic material factories have zero inventory and demand based pricing. High priced goods are completely out of stock, resulting in a cliff like decline in transactions. In addition, reducing the amount of praseodymium neodymium used in mid to low end magnetic materials and increasing the proportion of recycled materials further weakens the demand for primary praseodymium neodymium. Downstream inquiry follow-up is insufficient, upstream merchants are constrained by weak demand, and overall trading is cautious, resulting in a significant decline in the light rare earth market.
2、 The previous increase was too large, and the recent market downturn
From the beginning of the year to the end of April, the light rare earth market saw a significant increase, with some recent market corrections. In early May, the Implementation Regulations of the Mineral Resources Law came into effect, with both positive and negative effects. Traders and smelters concentrated on selling and reducing inventory, resulting in a high concentration of low-priced orders and a significant decline in the light rare earth market.
3、 Supply side marginal relaxation, increased spot circulation
In 2026, the mining quota will increase, mainly focusing on light rare earths, with a smelting operation rate of 85% -90%, and the on-site inventory will continue to accumulate. In addition, Myanmar’s mineral imports have resumed (with a high proportion of light rare earths), and the production of praseodymium neodymium oxide by MP Materials in the United States increased by 63% year-on-year in the first quarter, filling the domestic gap. In the early stage, high priced and reluctant to sell goods were concentrated in the market, and the spot circulation increased month on month, breaking the balance and causing a decline in the market situation.
In the short term, the rare earth market is prone to decline but difficult to rise, with a focus on maintaining a downward trend. With the increasing demand in downstream fields such as new energy vehicles, wind power installation, and industrial motors, coupled with the continuous tightening of rare earth industry control, the expectation of strategic storage, and the recovery of overseas high-end manufacturing demand, the supply and demand pattern of rare earths is expected to tighten again. At the same time, rare earths, as the core raw materials of high-tech industries, remain unchanged in the long-term demand growth logic under the background of carbon neutrality and high-end manufacturing upgrading, and the rare earth market is expected to strengthen in a long-term trend.
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