The Rare Earths MMI was flat at 16 this month, continuing to trade in the narrow band we’ve seen it vacillate in since 2012.
Apparently, a rising tide does not always lift all boats as Rare Earths bucked a price increase trend that touched all the metals we track this month. Stable supply from China ever since export quotas were lifted could either be blamed or thanked for the price stability, depending on which side of the buying fence you’re on. Substitution is also a factor, as less-tracked REs such as scandium are being used in alloys by more multinationals such as Airbus.
No major supply disruptions have materialized in the last few years and elements such as niobium and neodymium have appeared to be more price stable than their publicly traded, base-metal cousins. The only thing that could be construed as affecting rare earths this month was the announcement that the Indian government, quite cautiously, might open up a few RE mining blocks to companies sometime later this year.
According to a senior official in the Mines Ministry, the Indian government is looking at at least one rare-earth deposit in the central Indian desert province of Rajasthan to be put on the block, on an experimental basis, to widen the number of rare-earth miners in the country and ramp up production to pose a challenge to China, the undisputed top global supplier of REs.
State-owned Indian Rare Earths Limited is currently the sole miner and producer of REs in India, and it has joint ventures with Toyota Tsusho for production of mixed rare earth chloride.
The new supply would be welcome, if not entirely necessary right now, to companies that produce motors, magnets, light-but-strong structural steel and other RE end uses. Prices are so low right now that even Japan, which famously dealt with a de facto Chinese RE embargo in 2010 and 2011, is seeing its leading domestic RE producers pull back or abandon production entirely.
In February, Showa Denko President Hideo Ichikawa hinted at a further overhaul of its RE metals business, raising the prospect of either merging with another company or just getting out of REs entirely.
While our other prices have risen, it’s still a great time to be an RE buyer and this most niche of markets shows little to no sign of catching up with the pack.
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