Highlights
- Chinese rare earth prices are experiencing a notable slump.
- Declining values are observed across oxides, metals, and magnets due to poor downstream demand.
- Weak order flow and passive purchasing from separation plants are driving market stagnation.
- Some suppliers are urgently liquidating stock.
- The market downturn has broader geopolitical implications.
- This situation potentially challenges Western efforts to develop rare earth independence and diversify supply chains.
According to a Shanghai Metals Market (SMM) morning update (opens in a new tab) on Thursday, April 17, 2025, China’s rare-earth market is experiencing a notable slump, with prices for oxides, metals, and magnets broadly weakening amid poor downstream demand and eroding industry confidence. The April 18 report details a market adrift: rare earth carbonate hovered at 34,200 yuan/mt, while monazite and europium-rich ore traded around 42,100 and 187,000 yuan/mt, respectively. Praseodymium-Neodymium (Pr-Nd) oxide was priced in the 415,000–420,000 yuan/mt range, with terbium and dysprosium oxide holding nominally stable yet under quiet trade conditions.
SMM attributes the stagnation to weak order flow from magnetic material producers and passive purchasing behavior from separation plants, with even scrap prices declining under pressure from poor sentiment. Notably, some suppliers have begun offering at low prices, suggesting a growing urgency to liquidate stock despite long-term strategic value. Small and mid-size firms are reportedly accepting low-margin, even inverted orders, while large enterprises remain more insulated due to stable long-term contracts.
The SMM report appears fact-based but lacks geopolitical context, treating the rare earth sector as a closed Chinese domestic market. In reality, sustained low prices — driven by soft domestic demand or state-influenced oversupply — can have a chilling effect on rare earth investments elsewhere, particularly in the West. For the U.S., Australia, and allied nations trying to revive rare earth independence, China’s pricing downturn raises alarms: it pressures Western producers with slimmer margins while strengthening China’s ability to dominate the downstream magnet and materials value chain at the expense of market diversification.
As Rare Earth Exchanges has warned, price volatility — particularly downturns originating from within China — should not be mistaken for true supply weakness. Strategic planners must treat this as both a warning and a window: if Western policy remains reactive and profit-driven, rather than strategic and subsidy-supported, rare earth independence will remain aspirational.
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