Rare earth prices are falling due to weak downstream demand and increased global production outside of China.
The discovery of rare earth reserves in Wyoming offers the US an opportunity to reduce its reliance on Chinese imports and improve domestic supply chains.
China is imposing export restrictions on rare earth metals and technology in an effort to maintain its market dominance, leading to uncertainty and volatility in global prices.
On a month-on-month basis, rare earth metal prices have been declining sharply. While weak downstream demand could potentially be one reason for the price drop, another potential factor is increased global rare earth production outside of China. If true, China could find itself pushed down the totem pole in terms of rare earth magnet dominance. Meanwhile, China’s economy continues to falter due to a weakening real estate sector, which could also potentially impact prices. For now, China continues to hold its position as the world’s largest producer of rare earth elements.
Taking all these factors into account, the rare earth metals MMI (Monthly Metals Index) fell by a total of 19.89%.
A new rare earth metal find in Wyoming could have a significant impact on the global rare earth metals market by reducing the United States’ reliance on China for vital minerals. Several companies, including American Rare Earths Inc. and Ramaco Resources, have recently discovered significant rare earth deposits in the western state. What’s more, current estimates put the potential value of the reserves in the billions. The find is especially notable because rare earth elements are essential for a number of advanced technologies, including those related to electric vehicles, wind turbines, and defense.
The United States currently imports most of its rare earth magnets and minerals from China. If this recent find proves to be as abundant as estimates predict, the United States may be able to reduce its reliance on foreign suppliers, particularly China, while diversifying its rare earths supply chain. In fact, the new deposit could support the country’s energy transition and impact U.S. national security by supporting domestic production of rare earths-based technologies.
Thanks in part to the Wyoming discovery, it now appears likely that the United States will become a major player in the international rare earths market. With additional exploration and development, these deposits could help the United States overcome China’s hegemony in rare earths by offering domestic supplies of these vital minerals. It would also reduce the United States’ vulnerability to supply chain disruptions and geopolitical unrest.
China recently imposed strict restrictions on the export of rare earth magnet technology, as well as the mining and separation of rare earth minerals. This move could significantly impact global rare earths supply chains and prices. After all, the 17 metals classified as rare earth elements remain important to many sectors of the global economy, including electronics, clean energy, and defense technology.
China’s restrictions on rare earth metals and rare earth magnet manufacturing technology are a calculated move to maintain its hegemony in the rare earth metals market, as the country currently processes about 90% of the rare earth metals produced worldwide.
2024 Price Forecasts
Meanwhile, experts expect this to lead to global rare earth element prices experiencing ongoing uncertainty and possible price volatility throughout 2024. Additionally, stock prices of rare earth element processing companies have risen in response to China’s decision. For many, the ban further highlights the need to diversify rare earth element supply chains and expand local processing capacity overseas. Meanwhile, the United States and its allies continue to work to increase local processing capacity and reduce dependence on Chinese supplies of rare earth elements.