After appreciating a bit since mid-2013, MetalMiner’s monthly Rare Earths MMI® began falling off again over the last month of the year. The price index stands at a reading of 34.
As further indication that Beijing’s campaign to reign in the Wild West that was the Chinese rare earths market in the last decade, China’s biggest producer of rare earths, the Inner Mongolia Baotou Steel Rare-Earth Group, has recently acquired nine regional mining companies as part of a government master plan to consolidate the sector.
Since 2010, it has tried to improve industry regulation, imposing tough new production and export quotas, raising environmental standards and cracking down on smuggling, once the source of nearly a third of the rare earths flowing to international markets. Arguably it was the flow of illegally produced rare earths onto the world market that decimated Western producers in the 1990s and 2000s, rather than a concerted plot by Beijing to take over the rare earth market.
Since 2010, Beijing has sought to consolidate both refining and mining under the control of a small number of state-owned producers. As a result, prices have risen steadily this year as illegal exports have been curbed and legal export prices have been raised. Nevertheless, export quotas are far from being fully utilized as global markets have reduced their dependence on rare earth metals and sectors like renewables and electric autos have failed to hit earlier volume expectations.
The domestic Chinese renewable energy market has conversely been strong with ongoing investment projects in wind turbines and solar energy creating competition for rare earths against export markets.
What This Means for Metal Buyers
While good news for producers such as Molycorp and their Mountain Pass mine, rising prices last year were not such good news for consumers based outside of China, such as the North American and European renewables sectors which have generally seen RE prices rise during 2013. A recent dip in MetalMiner’s latest price index may be the first indication of a supply surplus in 2014.
Key Price Drivers
Yttria was down 18.7 percent for the month. Dysprosium oxide prices fell 18.6 percent. A 18.1 percent decline for terbium oxide left the price down as well.
The price of lanthanum oxide fell 17.9 percent. The price of samarium oxide closed the month after dropping 17.4 percent. Following a 12.5 percent decline in price, praseodymium neodymium oxide finished lower. Cerium oxide prices dropped by 12.3 percent this month. An 11.3 percent drop over the past month left neodymium oxide down. After falling 10.0 percent, neodymium also finished lower. An 8.2 percent drop over the past month hit europium oxide. Rare earth carbonate prices dropped by 5.5 percent.
Yttrium prices actually rose 3.6 percent. Praseodymium oxide prices inched up 1.8 percent. Terbium metal did not budge the entire 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.