According to statistics, the price trend of the domestic rare earth market in 2023 has declined. From the rare earth industry price index chart, it can be seen that the rare earth index at the beginning of the year was 664, and as of December 28, it was 459, an overall decrease of 205 points. In early February, the domestic rare earth industry reached its highest price, and in early May, the rare earth price was at a low level for the year. The trend of the domestic rare earth industry price index in 2023 is as follows:
In 2023, the price trend of domestic light rare earth market has significantly declined. The price of neodymium oxide at the beginning of the year was 770000 yuan/ton, and the market price at the end of the year was 447500 yuan/ton, with a price drop of 41.88%; The price of neodymium metal at the beginning of the year was 952500 yuan/ton, and the market price at the end of the year was 567500 yuan/ton, with a year-on-year decline of 40.42%; The price of praseodymium neodymium oxide at the beginning of the year was 710000 yuan/ton, and the market price at the end of the year was 447500 yuan/ton, with a year-on-year decline of 36.75%; The price of praseodymium neodymium alloy at the beginning of the year was 865000 yuan/ton, and the market price at the end of the year was 547500 yuan/ton, with a year-on-year decline of 36.71%; The price of praseodymium oxide at the beginning of the year was 695000 yuan/ton, and the market price at the end of the year was 465000 yuan/ton, with a year-on-year decline of 33.09%; The price of praseodymium metal at the beginning of the year was 915000 yuan/ton, and the market price at the end of the year was 600000 yuan/ton, with an annual decline of 34.43%. The trends of each product are as follows:
In 2023, the market price of heavy rare earths slightly declined. According to statistics, the market price of dysprosium oxide in China was 2.5 million yuan/ton at the beginning of the year and 2.48 million yuan/ton at the end of the year, with a year-on-year decline of 0.8%; At the beginning of the year, the price of dysprosium metal was 3.21 million yuan/ton, and at the end of the year, it was 3.175 million yuan/ton, with a decrease of 1.09% throughout the year; The beginning price of dysprosium ferroalloy was 2.485 million yuan/ton, and the end of year market price was 2.47 million yuan/ton, with a year-on-year decline of 0.60%. The specific trend is as follows:
From the rare earth trend chart, it can be seen that the domestic trend of light and heavy rare earths has differentiated, with the overall decline mainly concentrated in the first quarter. The prices of light and heavy rare earths have significantly decreased, and the light rare earths market has been in a low and volatile stage in the later period. However, the trend of heavy rare earths market has increased in the second and third quarters, almost flattening the decline in the first quarter. The overall analysis is as follows:
Phase 1: The domestic rare earth market prices significantly decreased in the first quarter. At this stage, there are few inquiries from downstream magnetic material enterprises in China, and magnetic material factories mainly consume existing inventory. The actual transaction price of rare earths continues to shift downward, and the rare earth market is under pressure and declining. In addition, with the simultaneous decline in prices of rare earth metals and oxides, the inverted cost of raw materials in metal factories is still difficult to alleviate in the short term. Some metal factories have reduced their production burden, resulting in poor downstream procurement and oversupply, leading to a significant drop in market prices.
Phase 2: The trend of light and heavy rare earths is differentiated in the second, third, and fourth quarters. With the continuous resumption of work and production by domestic rare earth manufacturers, domestic on-site supply has increased, and inquiries for praseodymium neodymium products in the market are relatively quiet. Transactions are mainly in demand, while the light rare earth market is mainly volatile. In addition, the price of praseodymium neodymium metal is still inverted, mainly to ensure the supply of long-term orders. Intermediaries are cautious in replenishing small quantities, and transactions are limited. At this stage, the light rare earth market is mainly characterized by low volatility. However, the heavy rare earth market has risen significantly. Due to the impact of high temperatures and rainfall, some rare earth mining enterprises have limited production, and some rare earth manufacturers have voluntarily reduced production, which has led to a decrease in spot inventory in the market. Separation plants and metal plants in the Sichuan region will have varying degrees of production reduction and shutdown. In addition, import sources from Myanmar are hindered, and favorable factors support the price trend of heavy rare earth markets.
How to interpret the downward trend of the domestic rare earth market in 2023 and the rare earth market trend in 2024?
Firstly, the country has issued an increase in the total quota for rare earth mining, smelting and separation. In 2023, the Ministry of Industry and Information Technology and the Ministry of Natural Resources issued total control indicators for rare earth mining and smelting separation, which were 255000 tons and 243850 tons respectively, an increase of 45000 tons and 41850 tons compared to 2023 (total rare earth mining of 210000 tons and total smelting separation of 202000 tons), with an increase of approximately 21.43% and 20.72%, respectively. China has large rare earth reserves, high supply, and fast consumption. According to statistics, the total global rare earth reserves are about 130 million tons, and China’s rare earth reserves are 44 million tons, accounting for 33.8% of the global total reserves. With the rapid extraction and consumption of rare earth resources in China, the country has implemented strict control over rare earth extraction and separation. In the past two years, mining indicators have been raised, and the mining indicators in 2024 may be higher than those in 2023, which will have a certain inhibitory effect on the rare earth market. The total amount of mining and smelting separation over the years is as follows:
Secondly, the export volume of rare earths has increased, and export prices have declined. The total export volume of rare earths from January to November 2023 was 48868 tons, a year-on-year increase of 10%, but the export unit price was 10.7 US dollars/kg, a year-on-year decrease of 23.2%. The export volume of Chinese rare earths has increased, and the demand for foreign rare earths has increased. However, the export prices have significantly decreased, weakening the bargaining power of domestic rare earth suppliers and to some extent, negatively affecting the domestic rare earth market. The overall price trend of rare earths in 2023 has declined. From the export volume of rare earths over the years, it can be seen that an increase in export volume is the trend. Domestic rare earth suppliers should enhance their bargaining power. Rare earths, as one of the non renewable strategic resources, long-term green and healthy development is a necessary path for the rare earth industry. The statistics of rare earth export volume are as follows:
Finally, the demand side of the new energy industry continues to develop. The development of the new energy sector provides strong support for the domestic rare earth industry, with a significant increase in the production and sales of new energy vehicles. In 2023, the penetration rate of new energy vehicles continues to increase. As of November, the production and sales of new energy vehicles in China reached 8.426 million and 8.34 million, respectively, with a year-on-year increase of 34.5% and 36.7%. The continuous development of new energy vehicles has brought long-term positive support to the domestic rare earth industry. In recent years, the production and sales of new energy vehicles are as follows:
To sum up, in 2023, the domestic rare earth market will decline. The country will be more and more strict in the rectification of the rare earth industry. In 2023, the mining output of rare earth will also increase. New energy vehicles will develop faster and faster. This will form a strong support for the demand of the rare earth market. The new energy and wind power industries will continue to develop. The national policies will benefit the development of the industry. In addition, there will still be a gap in the demand for rare earth in China, Chen Ling, a rare earth analyst at Business Society, predicts that the development of the rare earth industry will continue to improve in 2024, reflecting China’s determination to achieve long-term green development of rare earths. The rare earth market may rise in 2024, and it is expected that the lowest price will appear in the second quarter, while the rare earth market may rise in the third and fourth quarters.
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