Rare Earths Surge Above Price Floor Given to MP Materials

Prices of two key rare earth elements — crucial for making super-strong magnets used in EVs and defense equipment — have rallied on firm demand and supply bottlenecks, rising above a groundbreaking price floor provided by the U.S. last year to miner MP Materials, Eric Onstad reported for Reuters.

Beijing dominates the global rare earth supply chain, accounting for 90% of refining capacity and around 70% of mined output. (Photo: MP Materials)

The near doubling of prices over seven months means the U.S. government will not have to subsidize MP Materials’ output of neodymium and praseodymium (NdPr) as long as prices remain above the $110-per-kilogram threshold.

The rally to $123 per kilogram — the highest level since July 2022 — will also boost other rare earth companies that Western governments hope can reduce reliance on top producer China.

Beijing dominates the global rare earth supply chain, accounting for 90% of refining capacity and around 70% of mined output.

“The price rally has been driven by firm downstream magnet demand and deliberate supply management in China,” said Neha Mukherjee, research manager for rare earths at consultancy Benchmark Mineral Intelligence.

She cautioned that the elevated prices are likely temporary, with a downward correction expected by the end of March.

The Chinese price of NdPr oxide, regarded as the benchmark, has jumped to 850,000 yuan per metric ton, or $123 per kilogram, from $63 per kilogram on July 9, when MP Materials unveiled its multibillion-dollar deal with the U.S.