(Kitco News) – According to the Global Times, China’s rare earth prices have broken a 10-year high on Thursday, driven by the development of emerging industries, tight supplies and the consolidation of industries at the national level.
Insiders said that this could be an indication that marks the end of the era of the irrationally low prices of China’s rare earth, the Global Times revealed.
“The fundamentals of supply and demand are expected to support rare earth prices to continue to go up, since the fourth quarter is the traditional peak season for downstream demand for rare earths,” the newspaper pointed out.
As an example of tight supply, the Global Times referred to Australia’s Lynas, which accounts for 10 percent of the global light rare earth output, and which has reported a decrease of 10 percent on the output of neodymium praseodymium oxide in Q3 from the previous quarter and a year-on-year decrease of 6 percent.
“Moreover, Myanmar’s rare earth exports have reportedly shrunk due to the global pandemic,” the author of the report added.
At the same time, China’s rare earth export has continued to remain at a high level. In October, the export volume of rare earths reached 4,330.4 tons, a surge of 89.27 percent year-on-year, according to data from the General Administration of Customs, the Global Times noted.
Importantly, driven by the strong demand and tight supplies, the export price of the rare earth produced in China also increased to 3.44 billion yuan, a year-on-year growth of 78.5 percent.
According to the report, in March, the Ministry of Industry and Information Technology stated that China’s rare earths were not sold at the price of rare earths but sold at a price of ‘earth’, which was a signal of drastic changes in the industry.
In the context of carbon neutrality and China’s industrial transformation, the value of rare earths has also increased.
China’s strategic goals of “carbon peak and carbon neutrality” are an opportunity for the country’s rare earth industry, because the development of new energy vehicles and clean energy construction has a huge connection with rare earth, experts said.
“The price of China’s rare earth reached a historic high. While it may go down like other bulk commodities, it may never return to the very low level where it was because of the rising environmental costs and other factors,” the Global Times concluded.