At the beginning of November, disruptions in Myanmar’s rare earth supply reignited market interest in the rare earth sector. Meanwhile, following the elevated listed prices for rare earth products in September and October, Northern Rare Earth (600111.SH) announced a slight increase in its November listing prices.
According to industry insiders, Myanmar’s reduced rare earth supply is significantly impacting China’s heavy rare earth sector. Myanmar’s mining operations remain suspended, and this effect is expected to persist for some time. Analysts are optimistic about the recovery of the rare earth industry’s prosperity in the near future.
Myanmar Rare Earth Mine Remains Shut, Difficult to Restore Supply This Year
Myanmar ranks as the world’s third-largest rare earth producer and a critical source for China’s rare earth imports. According to China’s Customs data, from January to September this year, China imported 31,000 tons of rare earth oxides from Myanmar, accounting for 74.9% of total oxide imports during the same period.
The disruptions in Myanmar’s rare earth supply, coupled with the implementation of China’s Rare Earth Management Regulations on October 1, have limited supply, with several institutions expressing optimism about the future market. On November 1, Northern Rare Earth and China Rare Earth (000831.SZ) stocks surged to the daily limit on the A-share market, and rare earth-related stocks also rallied in the Hong Kong market.
A representative from Northern Rare Earth commented, “The rare earth sector entered a downward cycle in 2022, and it currently resides in a bottom phase. However, it has shown signs of stabilizing, and market sentiment is building. Market fluctuations significantly affect the rare earth industry, primarily driven by market expectations.”
When asked if this event might influence rare earth prices, the Northern Rare Earth spokesperson added, “Myanmar’s rare earth imports represent a substantial portion of China’s rare earth imports, so we expect this event’s impact to last. Myanmar’s reduced rare earth supply has a considerable effect on China’s heavy rare earth sector, with some of our heavy rare earth products actively in production and sales.”
A representative from China Rare Earth also shared, “We can’t estimate the full impact or duration of this event. We have our own mines in production, ensuring a stable supply of raw materials for downstream companies. Production in the rare earth industry is strictly controlled by quotas, which can be adjusted within our group, so this isn’t a challenge for us.”
On October 31, Huatai Securities released a research report stating that the suspension of Myanmar’s mines, combined with domestic heavy rare earth supply constraints due to environmental factors, could result in a shortage of heavy rare earths. “We believe the situation could significantly impact labor, hydroelectricity, and other resources, making it challenging to restore supply this year. However, the situation’s development should be closely monitored.”
SMM sources indicate that domestic rare earth processing plants currently have approximately two months’ worth of raw material inventory. Analysts believe that if this inventory is exhausted, heavy rare earth prices could surge, while light rare earth supply should improve but may not face the same level of shortage as heavy rare earths.
“Golden September, Silver October” Season Ends with Lower-than-Expected Prices; Northern Rare Earth Posts “Three Consecutive Increases”
On November 1, Northern Rare Earth announced its November listing prices for rare earth products, marking the third consecutive monthly increase. However, this month’s increase is noticeably lower than in September and October, with several rare earth products posting only a 0.19% month-on-month price increase.
SMM data show that, as of November 1, praseodymium-neodymium oxide was trading between RMB 422,000 and RMB 424,000 per ton, and praseodymium-neodymium metal was quoted at RMB 520,000-525,000 per ton, slightly higher than Northern Rare Earth’s November listing price. However, SMM notes that market sentiment remains cautious.
The Northern Rare Earth representative explained that the company’s listed prices follow an internal pricing mechanism while reflecting market conditions, aiming to stabilize rare earth prices and maintain supply-demand balance. “At times, high prices may reduce market activity; listed prices mainly aim to stabilize rare earth prices.”
The “Golden September, Silver October” market season ended on a lower note than expected, potentially influencing Northern Rare Earth’s decision to moderate its November price increase.
Li Congming told reporters, “In October, magnetic material companies’ capacity utilization rate slightly decreased, as companies abandoned certain long-term contracts in response to lower Q4 prices, reducing operating rates. While rare earth prices usually weaken in Q4, they are currently at relatively low levels with limited downside. Moving forward, prices may experience minor fluctuations.”
However, the Northern Rare Earth representative mentioned that recent market demand appears stable, with downstream magnetic materials factories receiving more orders. “Our upstream rare earth raw materials production is at full capacity, and magnetic materials companies are operating at about 80% utilization. Our Q3 earnings showed a smaller year-on-year decline, with sequential improvement, mainly supported by higher sales volumes and stable product prices.”
China Rare Earth commented during a recent earnings call that, influenced by market conditions and industry cycles, rare earth product prices experienced a rapid decline in Q1, followed by relatively stable but low levels in Q2 and Q3. Entering Q4, some rare earth product prices are recovering. With the official implementation of the Rare Earth Management Regulations and improvements in the supply-demand balance, main rare earth product prices are expected to return to a relatively reasonable range.
[Source – 上海有色网] 缅甸稀土矿开采仍停滞 北方稀土连续三个月上调挂牌价 业内：行业有望回春|行业动态 https://news.smm.cn/news/103020497
