Ex-China prices on the rise: Q2 Rare Earths Price Review

Rare earth pricing trended downwards through most of April and May, before showing tentative signs of stabilisation and a slight recovery in June. Throughout the quarter, Benchmark’s China PrNd oxide index fell by ~5%, pulling back from the peak levels during the robust Q1 rally. However, heavy rare earths showed more divergent trends, with dysprosium and terbium staging a meaningful recovery by the end of the period. The defining theme of Q2, however, was the widening gulf between Chinese domestic and ex-China heavy rare earth prices, a continuation of dynamics set in motion by China's curbing of exports to Japan back in January. As the largest consumer of heavy rare earths outside China, Japan had historically relied heavily on direct Chinese supply. With that channel restricted since the start of the year, Japanese buyers spent Q2 aggressively sourcing material from the limited pool available in Europe and North America, progressively bidding up ex-China prices while Chinese domestic pricing remained comparatively insulated.