The Rare Earths MMI inched one point higher, reaching 22 points in July. This sub-index increased almost 5% from the previous reading.
Rare-earth prices have continued their uptrend that began in March.
Samarium oxide rose by 8.5%, while terbium oxide increased by 5.9%. Meanwhile, the dysprosium oxide price continued to fall slightly, posting a price drop for the second straight month.
What’s Going On in the Background?
China currently produces around 85% of rare earth metals. Supply is, therefore, restricted to Chinese production and environmental policies.
With growing demand due to the investment in renewable sectors, such as electric cars and wind turbines, investment in rare-earth metal production remains critical.
South Africa could play a strategic role in rare-earth metals supply. The Steenkampskraal mine claims to have the highest grades of rare-earth elements in the world. Moreover, the mine had previously been in operation between 1952-1963, according to its website, and appears to be putting in place all of the equipment and permits needed to bring the mine to production. Rising prices will help. Nevertheless, China remains the global price setter for rare earths.
In addition to South African rare-earth production, Canada’s Mkango Resources confirmed its plans to start mining from its Songwe Hill mine in Malawi within three years.
By 2021, the mine will produce about 3,000 tons per year of rare earths. The mine will produce 1,000 tons of praseodymium, neodymium, dysprosium and terbium, according to a recent Reuters article.
The Mountain Pass mine, located in California, is struggling to reopen due to a long-running fight between distressed debt investors. Since Molycorp filed for bankruptcy, due to spending on an experimental ore-processing system, its mine has been caught between the feuding creditors.
The court process remains in its early stages— depending on the outcome, Molycorp could lose its rights to run this mine.
What This Means for Industrial Buyers
Rare-earth metals seems to show signs of a bullish narrative. However, dysprosium oxide finished June weaker than it finished May, which potentially points to a good opportunity to buy.
Actual Rare Earth Metals Prices and Trends
Thirteen out of 14 of the rare-earth metals and mineral prices have inched higher this month.
Yttrium rose by 2.7%, reaching a price of $33.97/kilogram. Europium oxide increased only by 0.5% this month, going up to $88.43 per kilogram. Meanwhile, the dysprosium oxide price dropped by 2.9% this month, falling to $172.5/kilogram.
Terbium oxide jumped 5.9% to $3,242.61 per kilogram. Neodymium oxide increased by 5.3% to $44,512.24 per metric ton.