China's rare earth price exceeds a historic high amid booming demand and tight supplies By Yin Yepin12 Nov 2021 09:36
Rare earth prices have broken a 10-year high on Thursday, driven by the development of emerging industries, tight supplies and the consolidation of industries at the national level. Insiders said that this could be an indication that marks the end of the era of the irrationally low prices of China's rare earth.
Within 3 minutes after the opening of the market at the 85th High-Tech auction by the China Northern Rare Earth (Group), the four targets of 20 tons of neodymium praseodymium all reached the alarm price and were sold at a price of 930,000 yuan ($145,452) per ton, according to Baotou Rare Earth Products Exchange on Thursday. This price has broken a 10-year high record.
At the same time, the profitability of rare earth companies has also greatly improved. China Minmetals Rare Earth stated in a recent announcement that the company's 2021 operating revenue target is 2.7 billion yuan ($422 million), an increase of about 63 percent from 2020 operating revenue of 1.66 billion yuan ($250 million).
Industry insiders said that the recent price increase was caused by the two-pronged effect on supply and demand. However, the effects on supply are more obvious.
The trade manager of a domestic rare earth company told the Global Times on Thursday that the price jump is the result of high market demand and short supplies.
"All the bulk commodities are rising substantially in recent months and rare earth certainly is not exception," he said.
The fundamentals of supply and demand are expected to support rare earth prices to continue to go up, since the fourth quarter is the traditional peak season for downstream demand for rare earths, experts said.
Australia's Lynas supply, which accounts for 10 percent of the global light rare earth output, has tightened leading to a decrease of 10 percent on the output of neodymium praseodymium oxide in Q3 from the previous quarter and a year-on-year decrease of 6 percent, according to media reports.
Moreover, Myanmar's rare earth exports have reportedly shrunk due to the global pandemic.
At the same time, China's rare earth export has continued to remain at a high level. In October, the export volume of rare earths reached 4,330.4 tons, a surge of 89.27 percent year-on-year, according to data from the General Administration of Customs.
Meanwhile, the cumulative export volume of rare earth, from January to October this year, exceeded 39,967 tons, a year-on-year increase of 39.4 percent.
Driven by the strong demand and tight supplies, the export price of the rare earth also increased to 3.44 billion yuan, a year-on-year growth of 78.5 percent.
China has no obligation to be a "rare earth supplier" to the world, Lin Boqiang, Director of the China Center for Energy Economics Research at Xiamen University told the Global Times on Thursday, noting that China's rare earth must ensure the safety of the supply chain and the sustainable development of the environment.
"Under these premises,
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