However, the increases were not to last, and prices soon reverted to a downtrend.
“This was the first-time rare earths prices had recovered after a continuous decline (in 2023), but after a brief recovery, prices are now falling again,” Benchmark pricing and data analyst George Ingall said in a report that month.
Muted demand has weighed on prices, but year-on-year increases in mine supply have also capped price growth.
Global rare earths output has rapidly risen from 240,000 metric tons in 2020 to 350,000 metric tons in 2023, according to US Geological Survey data. The lion’s share of rare earths production continues to be dominated by China, a factor that remains relevant for the industry as the Asian nation continues to flex its control.
East vs. west divide still key for rare earths
Rare earths, which are essential in various high-tech applications, including electric vehicles (EVs), wind turbines and electronics, have become a political pawn between the east and west.
Currently, China and the US are locked in a geopolitical struggle over rare earths, with tensions mounting.
In late 2023, China imposed bans on exporting technologies for rare earths processing, tightening its grip on the global supply chain. By mid-2024, reports were circulating that the country’s State Council would introduce stricter regulations on domestic rare earths mining, smelting and trading, effective October 1, 2024. The rules would declare rare earth resources state-owned and require companies to maintain detailed records in a traceability system.
The US responded with tariffs on Chinese EVs and critical minerals, aiming to counter China’s dominance while bolstering domestic production. These measures underscore escalating tensions, with both nations prioritizing strategic control over rare earths amid growing demand for green technologies and national security needs.
While each nation grapples for supply chain security, Jon Hykawy, president and director at Stormcrow Capital, told the Investing News Network (INN) that a more diplomatic approach is needed.
“There is a potential fork in the path regarding critical materials, more broadly, and rare earths, in particular, when it comes to overall trade strategy between western nations and China,” he said via email.
“By my calculations, if we maintain an integrated trade structure, then, together, we will probably be able to provide sufficient quantities of both NdPr and DyTb (dysprosium-terbium) to achieve our goals in both the automotive and clean energy sectors; NdPr is easy, DyTb is harder, but it can be done.”
However, if western nations decide they want to exclude China, they will face shortfalls.
“If we decide to go our own way in the west, then we can likely deliver enough NdPr to do what we need to do. (But) we are unlikely to make enough DyTb to enable the intended use of all that NdPr,” he noted.
Hykawy also took aim at governments not recognizing the increasing importance of DyTb.
“At…
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