The prices of rare earth elements, crucial for technologies ranging from lasers to electric vehicles, are under significant pressure due to weak demand and ample supply. In the first seven months of 2024, exports of rare earths from China, the leading producer, increased by 7.5% year-on-year. However, despite this rise, prices have fallen to their lowest levels in over three years.
Notably, the prices of dysprosium oxide and terbium oxide have dropped by 32% and 26%, respectively. Analysts indicate that local magnet manufacturers in China have reduced their consumption of these materials, contributing to the oversupply. Prices of neodymium and praseodymium oxides have also decreased by approximately 15% this year.
Expectations that the Chinese government would purchase rare earths for state stockpiles in July led to a temporary price increase, but this retreated once no purchases occurred. The National Food and Strategic Reserves Administration did not comment on the situation.
Producers are currently facing challenges, with many operating at a loss and stockpiling supplies as they await more favorable market conditions. Despite the current downturn, analysts anticipate that demand for rare earths will eventually recover, particularly in sectors focused on energy transition, such as electric vehicles and wind turbines.