Rare Earths Price Index at Whim of Markets, Not China WTO Case

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Rare-Earths_Chart_April-2014_FNL

Cerium oxide, lanthanum oxide and dysprosium oxide all drove the monthly Rare Earths MMI® down to a value of 32 in April, a decrease of 5.9 percent from 34 in March.

The big story on the REE front has been the World Trade Organization’s hand-slap of China’s rare earths export restrictions, ruling them a violation of global trade law. Stuart Burns, in his article last week titled “WTO Slams China Rare Earths Market, But Molycorp, Lynas Corp. Could Suffer,” commented, “Of course, China will appeal, so the status quo will remain for the time being, but speculation is already growing that an increase in exports could depress global prices for rare earths further.”

To that end, we asked Zachary Schumacher, rare earths analyst for Asian Metal, what his thoughts were on that.

Regarding future prices, the WTO case is “likely to bring down prices a bit over the medium to long term by some reasonable margin – but the consumers in the US are going to keep buying as much as they need only rarely, sometimes more, to hold material in stock,” Schumacher said.

A few rare earth metals, such as praseodymium oxide, terbium and europium, and lanthanum and cerium, are more likely to be hit price-wise over others, but more due to other market forces outside of the WTO case. (These include poor demand in end-use markets, among other things.)

Interestingly, there have been rumors of a national Chinese stockpile of rare earth oxides, especially the heavy RE oxides – a more impactful factor for the moment, according to Schumacher. “The biggest impact the WTO case has is it makes it so much harder to justify for investors to purchase stocks of JV mining companies now that the Chinese won’t have quota power over the long term,” he said.

Key Price Drivers of the MetalMiner’s RE Index

Cerium oxide prices fell 12.0 percent to $3,538 per metric ton after rising the previous month. After rising the previous month, yttria prices dropped 9.1 percent to $9,650 per metric ton. Terbium oxide prices fell 8.6 percent to $514.69 per kilogram after rising the previous month. After rising the previous month, lanthanum oxide prices dropped 8.3 percent to $3,538 per metric ton. Dysprosium oxide prices fell 8.1 percent to $273.43 per kilogram after rising the previous month. Following a 6.7 percent decline in price, europium oxide finished the month at $675.53 per kilogram. Terbium metal prices fell 6.1 percent to $739.86 per kilogram.

Following a 3.2 percent change in price, neodymium oxide closed the month at $51,469 per metric ton. After rising 3.2 percent, praseodymium neodymium oxide finished the month at $52,273 per metric ton. The price of neodymium rose 2.4 percent over the past month to $68,357 per metric ton, the second straight month of gains.

Praseodymium oxide experienced a flat month, staying around $93,287 per metric ton. Rare earth carbonate held pat last month at $4,021 per metric ton. Last month was consistent for samarium oxide, which did not move from $2,976 per metric ton. Prices for yttrium remained constant this past month, holding at around $46.64 per kilogram.

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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