Burst Commodity Bubble: Monthly Rare Earths Price Index Falls Again

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The Rare Earths MMI® fell off a cliff this month, dropping a whopping 25.6% from 39 to 29. Nearly all of the rare earth metals that make up the monthly index dropped, with the exception of rare earth carbonate and neodymium.

Chinese exports of rare earth metals have picked up substantially in March over April, according to an article published today in MetalMiner. Those exports go more toward Japan as opposed to the US market and appear as a positive demand signal, as Japanese fiscal and monetary policies designed to boost Japan out of its two-decade-long economic malaise begin to take effect.

The question remains, however: what will happen to rare earth metal prices as a result?

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As MetalMiner editor Stuart Burns notes, the dramatic drop in RE prices has more to do with the bubble that preceded the drop than anything else. In addition, the new rare earth supply coming on-stream from Molycorp and Lynas means China doesn’t control the entire market any longer.

With that, China also has ceded the ability to monopolize rare earth metal pricing. What that means, of course, from a producer standpoint remains unclear. Prices will trough at some point, but we’re all still asking – when?

The monthly Rare Earths MMI® registered a value of 29 in June, a decrease of 25.6 percent from 39 in May.

today's metal prices - MetalMiner IndXDysprosium oxide crashed 34.3 percent for the month. A 32.5 percent drop over the past month left yttrium gasping for air. The price of terbium oxide fell 32.4 percent. After falling 28.6 percent, yttria finished the month in a pit. Samarium oxide prices dropped by 26.3 percent this month. Cerium oxide prices fell 23.3 percent. Following a 23.1 percent decline in price, europium oxide finished the month quite hit. A 21.5 percent decline for neodymium oxide left the price in the ICU.

The price of terbium metal dropped 20.4 percent. Lanthanum oxide prices fell 13.2 percent. After falling 9.6 percent, praseodymium neodymium oxide finished the month down. Praseodymium oxide prices dropped by 3.4 percent this month.

Escaping the bloodbath, last month was consistent for rare earth carbonate, which did not move. The price of neodymium held steady 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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