Rare earths surge above price floor given to MP Materials

By Eric Onstad

LONDON, Feb 18 (Reuters) - Prices of 2 cardinal uncommon earths, important for making super-strong magnets utilized successful EVs and defence equipment, person rallied connected steadfast ‌demand and bottlenecks successful supply, supra a ground-breaking terms level provided by the U.S. ‌last twelvemonth to miner MP Materials.

The adjacent doubling of prices implicit 7 months means the U.S. authorities volition not ​have to subsidise MP Materials' output of neodymium and praseodymium (NdPr) arsenic agelong arsenic it remains supra the threshold of $110 per kg.

The rally successful prices to $123 a kg, the highest since July 2022, volition besides boost different uncommon world companies that Western governments anticipation volition beryllium capable to chopped reliance connected ‌top shaper China.

China dominates the planetary ⁠supply concatenation for uncommon earths, accounting for 90% of refining capableness and astir 70% of mined output.

"The terms rally has been driven by steadfast downstream ⁠magnet request and deliberate proviso absorption successful China," said Neha Mukherjee, probe manager for uncommon earths astatine consultancy Benchmark Mineral Intelligence.

She cautioned that the elevated prices are apt to beryllium temporary, with a downward ​correction expected ​by the extremity of March.

The Chinese terms of ​NdPr oxide, regarded arsenic a benchmark, has ‌jumped to 850,000 yuan per metric ton oregon $123 per kg, from $63 connected July 9, erstwhile MP Materials unveiled its multibillion-dollar woody with the U.S.

NdPr prices person been weighed down by oversupply successful caller years, and successful March past year, they sank to 345,000 yuan, the weakest since November 2020.

"While galore operations tin prolong output astatine today's elevated prices, the existent marketplace tightness is abbreviated ‌term and does not bespeak underlying marketplace fundamentals," Mukherjee ​added.

As portion of the ground-breaking woody with MP, the ​Pentagon offered terms enactment to MP for ​the NdPr it produces, based connected $110 per kg to assistance it amended ‌compete with China.

The U.S. authorities besides stipulated ​that the institution halt shipments ​of its mined output to China aft the worldly had fed 7%-9% of China's NdPr oxide accumulation implicit the erstwhile 3 years, according to consultancy Adamas.

The cut-off of proviso ​from MP coincided with tightened ‌supply successful China owed to what analysts regarded arsenic little uncommon world mining and ​smelting quotas, though the authorities did not marque a nationalist connection astir the ​quotas.

($1 = 6.9080 Chinese yuan renminbi)

(Reporting by Eric Onstad)