Rare Earth Raw Materials’ Price Approaching A Ten-Year High

The price of rare earth raw materials in mainland of China, which have reached a ten-year high, is expected to continue to rise. As the Beijing authorities are about to launch environmental inspections of mines and the doubts about the military coup in Myanmar, both of them will add momentum to the soaring price.

Reuters reported that the rare earth price index compiled by the China Rare Earth Association has risen by more than 40% from October last year to the end of January this year. However, driven by supply risks, it has risen by another 25% since the end of January.

The two major supply risks faced by rare earths are the military coup in Myanmar and the environmental protection inspection of Ganzhou City, a major producer of rare earths in mainland China. Although analysts believe that the supply of rare earths in Myanmar has not been interrupted, the market is worried that the coup may lead to supply cuts.

The price of magnet raw materials used in wind turbines and electric vehicles has been rising since the fourth quarter. This is due to strong demand and worries that China may restrict exports and strengthen controls on strategic industries. According to data from Asian Metal, the stock rally has continued into this year, with the prices of terbium oxide and dysprosium oxide rising 36% and 58% respectively, reaching their highest point since 2012.

Ryan Castilloux, managing director of Adamas Consulting Company, said that the price of magnets in mainland China has soared because of the possible interruption of supply in Myanmar, but this has not happened yet. About half of China's heavy raw materials come from Myanmar, and the northern rare earth mining areas controlled by the autonomous militia have yet to face obvious threats.

Castilloux believes that the new round of environmental inspections in Ganzhou City will have a greater impact on the supply contraction, because it will cause small factories to cease production.

• < Prev
• Next >