Japanese media: a variety of factors caused the price of rare earths to fall. There are signs of oversupply in Europe and the United States.
Japanese media said that the international price of rare earths is falling, and the price of index products has dropped by 3% to 4% from the previous month.
According to the "Nikkei Business News" website reported on August 8, in the main producing area of rare earth, the factory operation restrictions caused by environmental restrictions have been lifted in stages, and production is recovering. The trend of RMB depreciation driving exports has also led to a decline in the price of rare earth transactions. Prices for products such as magnets are also likely to fall.
The neodymium price (real-time contract) is currently around $64.5 per kilogram, and the PrNd mixture is around $65.5, both down 10% from the March high. The price of Terbium added to the magnet to improve heat resistance fell to around $460 per kilogram, which was also 10% lower than in March.
According to the report, in the field of rare earths, China's production accounts for nearly 80% of the world's total output. Since the spring of 2017, China has strengthened environmental protection restrictions and started on-site inspections of smelting plants. After the spring of 2018, inspections have gradually ended. The plant that has stopped running during the inspection has restarted production activities. As of mid-July, a series of inspections seems to have ended. The supply of rare earths is returning to levels before environmental restrictions are tightened, and supply in the market is increasing. In the summer of 2017, when many factories stopped working, the price of rare earth rose to nearly one hundred dollars.
According to the report, in addition, the Sino-US trade war led to the depreciation of the Renminbi and also promoted the price reduction of rare earths. Kawasaki, deputy director of a rare earth trading company in Japan, said that "Chinese producers are actively supplying" due to the increase in transactions settled in US dollars. In Europe and the United States, companies with demand for rare earths have reduced their purchases during the summer vacation, and there have been temporary signs of oversupply.
Due to the drop in raw material prices, a large Japanese magnet company said that it will “slightly cut prices in the next half year”. This may help auto parts manufacturers reduce manufacturing costs.
At the same time, the demand for rare earths continues to increase. The International Energy Agency predicts that global sales of pure electric vehicles and plug-in hybrids will reach 21.5 million units by 2030, up from 15 times in 2017.
According to reports, the demand for rare earths for engine magnets is likely to increase globally. According to data compiled by the Japan New Metals Association, demand for PrNd (including PrNd blends) in Japan increased by 10% year-on-year to 4,400 tons in 2017, a four-year increase.
In Japan, where component manufacturers gather, it is highly probable that demand for rare earths will continue to grow in 2018. Kawasaki believes that "after September, when demand recovers, prices will rise."