Highlights
- SMM report reveals China’s rare earth market in a tactical holding pattern with prices stable but underlying tensions evident.
- Upstream producers and downstream buyers are locked in negotiations, with end-user demand depressed in magnet and EV sectors.
- Market conditions suggest potential opportunities for Western rare earth producers to accelerate production and infrastructure development.
Shanghai Metals Market (SMM) released its Rare Earth Morning Meeting Summary (opens in a new tab) on May 23, 2025, spotlighting an industry at a standstill: intense upstream-downstream price haggling, declining end-use demand, and a prevailing mood of pessimism cloud China’s dominant rare earth supply chain. While pricing remains stable across oxides, metals, and magnets, the underlying signals point toward fragility.
Note the data derives from SMM and Rare Earth Exchanges (REEx) recommends readers view with a critical eye. Lemon Zhao informs about key price points and unfolding market sentiment. What follows is a brief REEx breakdown.
Rare Earth Ores:
- Rare earth carbonate: ¥35,100/mt
- Monazite: ¥41,200/mt
- Medium-yttrium/europium ore: ¥185,500/mt
- Trend: Sellers reluctant; miner shipping enthusiasm remains low.
Rare Earth Oxides:
- Pr-Nd oxide: ¥428,000–429,000/mt
- Dysprosium oxide: ¥1.61M–1.63M/mt
- Terbium oxide: ¥7M–7.08M/mt
- Trend: Price floor held by input costs; pessimism deepens.
Rare Earth Metals:
- Pr-Nd alloy: ¥525,000–529,000/mt
- Dy-Fe alloy: ¥1.57M–1.58M/mt
- Terbium metal: ¥8.75M–8.8M/mt
- Trend: Transactions remain thin as buyers resist elevated prices.
NdFeB Magnets (Blanks):
- N38 (Ce): ¥139–149/kg
- 40M: ¥185–195/kg
- 40H: ¥189–199/kg
- 45SH (Ce): ¥239–259/kg
- Trend: Weak trading; downstream inactivity reinforces wait-and-see stance.
NdFeB Scrap (Recycled):
- Trend: Scrap prices mirror oxide inertia; no major moves expected soon.
- Pr-Nd: ¥451–462/kg
- Dy: ¥1,606–1,628/kg
- Tb: ¥5,335–5,445/kg
Market Dynamics: Standoff Without Breakthrough
Zhao reports that upstream producers are entrenched in pricing negotiations with downstream processors and manufacturers, backed by high cost structures and limited willingness to sell low. Meanwhile, end-user demand remains depressed, particularly in the magnet and EV sectors, reinforcing a cycle of sluggish transactions and cautious inventory replenishment.
Despite the strategic significance of these materials, especially amid global efforts to reduce reliance on Chinese REEs, the domestic market appears stuck. Price floors are held not by robust demand, but by producer discipline and constrained supply. Many stakeholders, SMM notes, expect prices to drift sideways or soften, barring a rebound in downstream consumption or policy stimulus.
Strategic Materials, Stagnant Momentum
While some in the West continue to view China’s REE grip as a monolith of strength, market conditions tell a more nuanced story. The SMM report paints a picture of internal tensions and stalling momentum in China’s own REE sector, even as it dominates global production and refining. A few key takeaways:
- Price resilience ≠ healthy market: Stability in oxide and alloy pricing is not driven by growing demand but by constrained seller behavior.
- Midstream weakness exposed: According to this understanding, the reluctance of metal and magnet buyers to transact at current prices highlights fragility in China’s value-added segments, particularly as export controls increase volatility and downstream users seek alternatives.
- Strategic standoff mirrors geopolitical one: The back-and-forth negotiation dynamic within China’s market may reflect broader global power shifts, where even the dominant player is beginning to feel the strain of cost, environmental limits, and foreign divestment efforts.
Stable for Now, But Uncertain Ahead
With prices largely holding and no clear catalyst for upside movement, SMM concludes that the rare earth sector is in a tactical holding pattern. Buyers are resisting premiums, and sellers are protecting margins. Downstream markets remain cautious, and policy direction—especially related to export restrictions and clean energy demand—may determine the next move.
This stall offers a critical window for Western producers and allies—especially those aligned through initiatives like the _Minerals Security Partnership_—to accelerate their own REE production, midstream capabilities, and magnet manufacturing infrastructure. REEx continues to champion externalization and collaboration among Western allies, driven by the industrial resilience policy. Companies such as MP Materials and others are ready to embrace growth challenges. Is Washington DC, understanding?
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