Rare Earths MMI®: China’s Grip Wanes According to Former Defense Dept. Official

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China is unlikely to retain control of the global market for rare earths, because users have become more efficient in their consumption and found alternative sources, according to Eugene Gholz, an economist at the University of Texas who worked on rare earths at the Pentagon in 2010-12. Gholze wrote in a Council on Foreign Relations report that high prices encouraged investment in non-Chinese suppliers. Recent events seem to confirm his prediction.

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Molycorp restarted production at a rare earths mine in California, and Lynas opened a processing plant in Malaysia, helped by support from the Japanese government because non-Chinese supplies are more readily available for light rare earths such as lanthanum and praseodymium than for heavy rare earths such as dysprosium and europium.

The Financial Times reported that Rhodia of France is able to extract heavy rare earths from ore supplied by Molycorp and Lynas. Non-Chinese production of heavy rare earths could increase if the economics were more favorable.

After drifting 5.5%, terbium oxide dropped to CNY 2,600 ($423.33) per kilogram making it the biggest mover on the weekly Rare Earths MMI® this week. Terbium metal saw a 5.3% drop-off this week to end at CNY 3,600 ($586.15) per kilogram. Praseodymium oxide finished the week at CNY 500,000 ($81,410) per metric ton after falling 3.8%.

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After a 2.1% decline, dysprosium oxide closed out the week at CNY 1,420 ($231.20) per kilogram. Neodymium oxide prices were off slightly at CNY 280,000 ($45,590) per metric ton, down from CNY 285,000 ($46,404) a week ago. Neodymium oxide saw a 1.8% decline over the past week to CNY 280,000 ($45,590) per metric ton. The price of neodymium declined 1.4% over the past week, settling at CNY 365,000 ($59,429) per metric ton.

Cerium oxide traded sideways last week, hovering around CNY 15,000 ($2,442) per metric ton. Closing at CNY 2,400 ($390.77) per kilogram, europium oxide remained unchanged for the week. At CNY 15,000 ($2,442) per metric ton, the week finished with no movement for lanthanum oxide. At CNY 25,000 ($4,070) per metric ton, the price of rare earth carbonate did not change since the previous week.

Prices for samarium oxide remained constant, closing the week at CNY 18,500 ($3,012) per metric ton. Yttria remained essentially flat from the previous week at CNY 40,000 ($6,513) per metric ton. Yttrium prices held steady from the previous week at CNY 270.00 ($43.96) 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. 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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