A rare earth mining quota of 135,000 tonnes and a smelting and separation quota of 127,000 tonnes were unveiled for the first round of 2024, up by 12.50% from 120,000 and 10.43% from 115,000 tonnes respectively from 2023’s first round quotas.
The two ministries issued the first batch of quotas to the country’s two major rare earth companies, which are required to allocate the production to their constituent companies.
China North Rare Earth Corp has been allocated a mining quota for light rare earth of 94,580 tonnes and a smelting quota of 88,010 tonnes, China Rare Earth Group received a total mining quota of 40,420 tonnes including 30,280 tonnes for light rare earth, and 10,140 for ion-absorbed rare earth (medium and heavy rare earth), and a total smelting quota of 38,990 tonnes.
Rare earth quotas for Xiamen Tungsten and Guangdong Rare Earth Industry Group have been included in the quotas of China Rare Earth Group for 2024 following moves by China Rare Earth Group to further integrate its rare earth resources over the past year.
Xiamen Tungsten signed a cooperation agreement with China Rare Earth Group to set up joint ventures to develop the rare earths industry in Fujian province in September 2023, so for this round Xiamen Tungsten’s production quotas have included in China Rare Earth Group’s.
Meanwhile, Guangdong Rising Nonferrous Holding Group (GDRH), an indirect controlling shareholder of Guangdong Rising Nonferrous Metals Share, signed an equity-free transfer agreement with China Rare Earth Group on at the end of December to transfer its direct 100% equity stake in subsidiary Guangdong Rare Earth Industry Group to China Rare Earth to promote the integration of rare earth resources in Guangdong.
Driven by the growth and optimistic outlook in the country’s downstream magnetic materials market, which can be used in the new energy vehicles industry, China issued three batches of rare earth quotas for the first time in 2023.
The increase in quotas brought some bearish sentiment because of sufficient supply and weak downstream demand, and put pressure on most rare earth prices.
But with the approach of the Lunar New Year holiday (February 10-17), rare earth prices including neodymium-praseodymium oxide, a light rare earth, have been stable under quiet market conditions with most participants waiting to see how the market will react after the public holiday.
“The rare earth quotas [rose again] for the first batch of 2024, and I am holding a watchful attitude to see whether demand could pick up post-holiday,” a trader said.
Fastmarkets’ weekly price assessment of neodymium-praseodymium oxide 99% ratio (75:25), fob China, the main building block for neodymium iron boron (NdFeB) magnets, was $56-59 per kg on Thursday February 1, unchanged from January 25, but down from $71-74 per kg on October 19, 2023 when Fastmarkets began assessing the market.
Discover our rare earths prices and insights to stay ahead in this volatile market
Find out more about Fastmarkets’ rare earths prices and insights here.
