Rare Earth Exchanges

Rare Earth Pricing: Northern Rare Earth Group’s December 2024 Update

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Highlights

  • Chinese state-backed Northern Rare Earth Group sets detailed pricing for key rare earth oxides and metals.
  • Prices range from $563 to $72,170 per ton.
  • Strict purity requirements for high-tech applications.
  • Pricing strategy reflects market adaptability and commitment to quality in the global rare earth market.

Late last month, one of China’s largest state-backed rare earth companies, Northern Rare Earth Group High-Tech Co., Ltd., announced pricing for rare earth materials (opens in a new tab), setting rates in yuan per ton while adhering to high purity standards critical for high-tech and clean energy industries. In U.S. dollars (USD), the prices are as follows:

  • Lanthanum Oxide (La₂O₃): ¥4,100 (~$563)
    • Purity: TREO ≥ 97.5%, La₂O₃/REO ≥ 99.99%
  • Cerium Oxide (CeO₂): ¥7,600 (~$1,043)
    • Purity: TREO ≥ 99%, CeO₂/REO ≥ 99.95%
  • Praseodymium-Neodymium Oxide (Pr₆O₁₁ + Nd₂O₃): ¥416,600 (~$57,150)
    • Purity: TREO ≥ 99%, (Pr₆O₁₁ + Nd₂O₃)/REO ≥ 99.5%
  • Neodymium Oxide (Nd₂O₃): ¥424,900 (~$58,250)
    • Purity: TREO ≥ 99%, Nd₂O₃/REO ≥ 99.5%
  • Praseodymium-Neodymium Metal: ¥516,000 (~$70,780)
    • Purity: TREM ≥ 99%, (Pr₆O₁₁ + Nd₂O₃)/REO ≥ 99.5%
  • Neodymium Metal (Nd): ¥526,000 (~$72,170)
    • Purity: TREM ≥ 99%, Nd/REM ≥ 99.5%, Carbon ≤ 0.05%

Pricing Strategy and Quality Control

Prices are set by the company’s pricing committee based on public market quotes and real-world transaction data, offering bulk discounts for lanthanum and cerium but requiring upfront payments. Adjustments are made to reflect market fluctuations. Quality concerns must be raised within 90 days for domestic customers and 120 days for international clients, ensuring accountability.  Given the ownership structure (government) and geopolitical dynamics, undoubtedly, other factors are taken into account for their pricing process.

Insights

These products play a vital role in global clean energy and tech sectors, with Northern Rare Earth leveraging a flexible pricing model to maintain adaptability amid fluctuating demand. However, strict upfront payment policies and high purity requirements could deter smaller buyers, and frequent price adjustments may complicate long-term contracts.

Challenges and Risks

Northern Rare Earth faces several challenges, from market volatility and accessibility (limiting smaller market entrants) to production costs.  Of course, this firm results from a roll-up of rare earth firms backed by state ownership. The company claims its pricing strategy reflects its commitment to quality and adaptability. Still, challenges in market dynamics and accessibility underscore the need for careful navigation in this competitive and volatile industry.

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