• Neodymium-praseodymium (NdPr) has surged to $123/kg—the highest since July 2022—staying above the $110/kg threshold that triggers U.S. government price support for MP Materials under their landmark supply agreement.
• The rally stems from tight supply linked to China’s deliberate management of mining quotas and MP’s halted shipments to China, which previously supplied 7–9% of China’s NdPr oxide production.
• The price spike may be temporary, according to analysts, but it underscores a strategic shift: price floors and supply constraints are now tools of industrial policy as the U.S. works to de-risk critical magnet materials from Chinese dominance.

Neodymium-praseodymium (NdPr)—the rare earth pair that underwrites EV motors, wind turbines, and defense-grade magnets—has surged to $123 per kilogram, the highest since July 2022. That level sits above the $110/kg price-support threshold tied to the U.S. government’s landmark agreement with MP Materials last year.

In plain English: as long as prices stay above $110/kg, the U.S. government does not need to provide price support to MP for NdPr under that structure.  Reuters (opens in a new tab) attributes the rally to firm downstream magnet demand plus tightness in supply, with analysts pointing to deliberate supply management in China. China’s benchmark NdPr oxide price has jumped to about 850,000 yuan per metric ton (roughly $123/kg), up sharply from mid-2025 levels.

What Holds Up Under Scrutiny

Several key claims in the Eric Onstad (Reuters) piece align with known supply-chain realities:

• China dominates rare earths at the choke point: roughly 90% of refining capacity and about 70% of mined output.
• The Pentagon’s $110/kg mechanism functions as a strategic downside backstop for NdPr economics—especially relevant in a market prone to policy-driven price swings.
• MP’s prior shipments to China were material: Reuters cites Adamas estimating MP feed had supplied roughly 7%–9% of China’s NdPr oxide production over the prior three years before the U.S. required MP to halt those shipments.

The piece also correctly notes the context: NdPr had been oversupplied and depressed, sinking to 345,000 yuan/ton in March last year—its weakest level since Nov 2020.

Tight Market or Tactical Repricing?

Benchmark Mineral Intelligence warns the elevated pricing may be temporary, expecting a downward correction by the end of March and arguing the current tightness does not reflect “underlying market fundamentals.”  Rare Earth Exchanges™ has been informed by a few experts on condition of anonymity that while a fundamental need for heavy rare earths (e.g. terbium, dysprosium builds), its plausible that in a couple years there could be a glut of NdPr.

Reuters reports that the MP-to-China supply cut coincided with analyst-observed tightening in China linked to lower mining and smelting quotas, though China did not publicly confirm the quota shift. That timing is notable, but it’s still an association, not proof of coordination.

The Real Signal: Price Floors as Industrial Policy, Not Charity

The important investor takeaway is not the rally itself. It is the architecture: price floors and offtake constraints are now tools of industrial strategy. If NdPr falls, the backstop matters. If it holds, the backstop stays dormant—but the policy signal remains: the U.S. is trying to “de-risk” midstream and magnet inputs in a market where China sets the tempo.

Milestone, yes. Turning point? Not yet.