Monthly Rare Earth Metals Price Index Drops 10% as China Cuts Back

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MetalMiner Rare Earth Metals Price Index Nov 2012 chart

MetalMiner’s monthly rare earths price index, currently the worst-performing index within our monthly metal price series, fell again by five points to 45. When compared to the Jan. 1, 2012, baseline reading of 100, only the monthly rare earth index has fallen by more than half.

November’s Rare Earths MMI® registered a value of 45, a decrease of 10 percent from 50 in October.

“China has begun shutting down production in an effort to shore up rare earth metal prices,” said Lisa Reisman, managing editor today's metal prices - MetalMiner IndX
of MetalMiner, quoting a recent story in MetalMiner on sliding rare earth prices. “Inner Mongolia Baotou Steel Rare-Earth, one of China’s leading rare earth producers, has halted production at some of its smelting and separation operations in an effort to stabilize slumping prices.”

We view this as a positive signal for a number of reasons, according to Reisman.

First, one of the primary reasons US rare earth producers shuttered production in the 90s came as a result of low prices available from the Chinese. The fact that government authorities in China have begun monitoring capacity will eventually boost prices.

As to what has caused the lower spot prices — we’ll cover that in a follow-up post.

Price Drivers of Rare Earths Index Drop

today's metal prices - MetalMiner IndX
Even though dysprosium oxide rose 5 percent over the past week, it tumbled 23.4 percent on the month. The price of samarium oxide dropped 22.5 percent after staying flat the previous month. The price of praseodymium neodymium oxide fell 19.7 percent over the past month, the second straight month of declines.

The price of terbium oxide fell 14.9 percent on the month (it fell 6.5 percent this past week alone). The price of cerium oxide finished the month 11.5 percent lower. This was the sixth straight month of declines for cerium oxide.

The price of europium oxide declined 10.7 percent over the past month. The price of neodymium oxide fell 4.3 percent, the second straight month of declines. After rising from September to October, the price of terbium metal fell 1.7 percent.

The price of yttrium increased a slight 0.8 percent last month.

The Rare Earths MMI® collects and weights 14 global rare earth metal price points to provide a unique view into rare earth metal price trends over a 30-day period. For more information on the Rare Earths MMI®, how it’s calculated or how your company can use the index, please drop us a note at: info (at) agmetalminer (dot) com.

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