via metal minor
Rare earth MMI (monthly metal index) There was a significant backlash after that. Four months of a sharp decline. Overall, the index rose by 14.36%. This large increase may indicate that prices for rare earth metals finally bottomed out between March and April.
China’s rare earth metal profits continue to decline
Profitability continues to decline in China’s mining and processing industries, even as the country seeks to maintain control of its vital rare earths market. China Rare Earth Resources and Technology, a major state-owned enterprise, reported a 45.7% decline in net profit and a 5.4% decline in net profit. sale in 2023. Revenues from other Chinese rare earth producers fell as well. 60-79%.
This decline in profits is primarily due to China’s economic problems and other countries’ attempts to establish their own supply chains for rare earth elements. China has long held a dominant position as the world’s largest producer of rare earths. However, the country’s industry ministry recently acknowledged that rare earths remain “undervalued” and “wasted”. “Vicious competition”.
China’s rare earth sector continues to experience a “foundation stage” of rapid growth and structural change in response to these issues. Meanwhile, the Ministry of Industry appears to be pushing for stricter rules, such as requiring importers and exporters to comply with export controls and international trade laws, as part of maintaining the country’s market. control.
Despite challenges, China remains the world’s top rare earth producer
Despite these setbacks, China remains at the top of the global rare earth market. The country still holds about 40% of the world’s stocks of rare earth elements, followed by Myanmar, Australia, Russia and India. Even as other countries move forward in building their own rare earth capabilities, China’s established infrastructure and rare earth processing capabilities still put it ahead of other countries. glove.
Linus rare earth costs are tightening as demand declines in China
Australia’s Lynas Rare Earths Company is cutting prices and expenses to weather a sharp drop in rare earth prices and weaker demand in China. The company recently announced that its net profit for the first half of the year will decline by 74%, mainly due to price declines for the company’s two neodymium and praseodymium (NdPr). Primary product.
“As we focus on softer pricing markets, it is essential that we maintain a focus on value for money,” said Lynas CEO and Managing Director, Amanda Lacaz. However, the company remains “very positive” about its long-term outlook, estimating that supply will need to increase by then. 81% to meet the demand predicted by 2035.
Impact on rare earth metal procurement companies
A decline in China’s rare earth demand and subsequent price tightening for Lynas could negatively impact companies that rely on rare earths as key product inputs. With this in mind, rare earth metal sourcing companies should be aware of the following:
- Increased costs for rare earth buyers – Companies that obtain rare earths such as neodymium and praseodymium may have to pay more for their inputs as Lynas tightened pricing during the market downturn . This could put pressure on profit margins or force you to raise prices. upon client.
- Potential Supply Chain Disruptions – The global supply chain for rare earths may be disrupted, particularly where Lynas is a source of rare earth metals. This could lead to further price increases and supply problems for rare earth consumers outside China.
- Increasing dependence on China’s dominance – Approximately 80% of the global rare earth market is controlled by China, so problems with supply chains outside of China could also impact rare earths. buyer. The lack of diverse sources of supply leaves these buyers susceptible to the influence of the Chinese market.
- Clean Energy Transition Challenges – Market disruptions and rare earth price fluctuations could delay global adoption of green technologies
by metal miner team
Other top articles on Oilprice.com:
