Rare Earth Price Dynamics Amid Negotiation Stalemates, Underlying Mounting Geopolitical Tension Topic Avoided

Highlights

• Rare earth concentrate prices surge due to production maintenance halts and upstream supply constraints.
• Downstream buyers resist price increases, citing low terminal order prices and sufficient inventory.
• Market tensions persist with complex pricing negotiations between upstream suppliers and manufacturer.s

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Shanghai Metals Market (SMM) reports (opens in a new tab) that rare earth concentrate prices have risen sharply due to production suspensions and increased stockpiling by downstream enterprises, though broader market tensions persist. Key drivers include maintenance halts at raw ore separation facilities, which have limited supply and prompted suppliers to hike oxide price quotes. This has reduced activity in low-price markets and led to an upward trend in mainstream rare earth product prices.

However, these price increases face resistance. Despite higher oxide prices, downstream buyers, particularly magnetic material enterprises, are reluctant to purchase at elevated rates due to low terminal order prices and sufficient inventory. For instance, NdFeB blank prices, converted to Pr-Nd alloy, remain stagnant at 480,000–490,000 yuan/mt, creating cost pressures for metal plants. As reported by Rare Earth Exchanges, Baotou Steel’s Q1 2025 pricing adjustments—raising concentrate prices by 4.7% quarter-on-quarter—reflect ongoing upstream cost increases but also underscore the market’s tight margins and negotiation challenges.

While SMM highlights supply constraints and pricing adjustments as core drivers, it downplays the global rare earth demand landscape, particularly the role of geopolitical factors and non-Chinese buyers in shaping prices. Furthermore, it avoids addressing the structural over-reliance on Chinese processing, which underpins these recurring market tensions. Why would they avoid that topic?

As the Chinese New Year approaches, the report predicts relative price stability but offers little insight into longer-term strategies for mitigating such cyclical volatility.