Will rare earth prices this round hit a new historical high?

Around the same time, Northern Rare Earth announced its H1 2024 financial results on July 9, forecasting a 'sharp increase' in profits—net attributable profit is expected to reach RMB 900–960 million, representing a year-on-year growth of 1,882.5% to 2,014.71%. Such massive profit growth still falls short of RMB 1 billion; readers can calculate for themselves what the prior baseline was. As for how much of these profits stem directly from rare earth mining or utilization activities, I did not verify the data—readers with relevant insights are welcome to share in the comments. According to domestic media reports, some Chinese institutions attribute this surge to: 1) Accelerated capacity expansion in downstream and midstream industries—such as new-energy vehicles, inverter air conditioners, and humanoid robots—driving robust upstream demand for rare earths; 2) Severe contraction in Myanmar’s rare earth supply due to torrential rains. However, the growth rate of new-energy vehicle sales in China has clearly peaked, and the competitive landscape has already shifted (e.g., toward hybrid and plug-in hybrid models); export growth has long been decelerating. Products like air conditioners rely heavily on domestic subsidy programs, while humanoid robots lack even clearly defined application scenarios—so the claimed 'capacity expansion among downstream enterprises' remains highly questionable. Point (2), however, is accurate: since 2023, China has imported large volumes of rare earths from Myanmar. In 2024, imports from Myanmar accounted for 57% of China’s total rare earth imports—but the absolute volume declined significantly compared to 2023. From January to May this year, import volumes dropped roughly 30% year-on-year. For Zhihu users interested in the global rare earth landscape and related geopolitical dynamics, please refer to my earlier answer—it offers a comprehensive overview. Another factor driving up rare earth prices is the global rise in rare earth prices—not because global demand for key commodities has surged, but because an increasing number of countries are launching independent or joint mining initiatives. This has raised the overall cost structure of the international rare earth market, which had previously been dominated by China’s low-price model—signaling that many nations are now actively filling gaps in their own rare earth industrial chains.

Facing China’s 'chokepoint' strategy, the U.S. accelerates restructuring of its rare earth supply chain.

This initiative aims to counteract the exclusionary impact of China’s 'low-price strategy' on Western markets—previously, MP Materials’ average sales price stood at just USD 52 per kilogram, severely squeezing Western firms’ profitability and dampening investment incentives. The price-floor mechanism, backed by funding under the U.S. Defense Production Act, establishes a guaranteed minimum price for American rare earth producers. Concurrently, JPMorgan Chase and Goldman Sachs have jointly committed an additional USD 1 billion to fund MP Materials’ new rare-earth magnet factory; the facility is scheduled to begin operations in 2028, with an annual production capacity of 10,000 tons. Spurred by this series of developments, MP Materials’ stock price surged by as much as 60%, while shares of other rare earth companies also soared amid growing investor confidence in government-backed industry guarantees. Lynas Rare Earths Ltd.—an Australian firm currently constructing a refinery in Texas—rose 20%, marking its highest level in over five years. Western analysts have noted that U.S. and European rare earth enterprises gradually lost ground in production capacity primarily due to Chinese firms’ pricing advantage. The Department of Defense’s price floor represents the long-sought price security that U.S. critical-minerals companies have advocated for years. This move signals a strategic pivot in Western rare earth market mechanisms—from laissez-faire economics toward state-led intervention: leveraging national capital and policy-driven price guarantees to dismantle China’s dominant low-price competition logic, and attempting to build a self-sustaining Western rare earth economic ecosystem. Second, accelerating domestic mineral development: reviving rare earth resource mobilization. On July 11, U.S. Energy Secretary and Wyoming Governor, among other officials, attended the groundbreaking ceremony for Ramaco Resources’ rare earth project in Wyoming. Originally a coal company, Ramaco discovered, beneath its Brook Coal Mine, an estimated 1.7 million tons of rare earth oxides—including critical elements such as neodymium, praseodymium, dysprosium, and terbium. The initial plan includes launching a pilot plant this year, with projected total investment of approximately USD 500 million. If the project qualifies for the same price-floor mechanism extended to MP Materials, its payback period would shrink to three years—making it highly attractive to investors. This could become the first newly developed rare earth mine in the U.S. in 70 years. Its strategic significance extends beyond resource substitution: it aims to establish a fully domestic, end-to-end closed-loop system—'mining–refining–sales'—to ensure stable supplies for domestic users, especially defense and high-tech sectors. Analysis by U.S. national laboratories indicates the Brook deposit contains 40% rare earth oxides—neodymium, praseodymium, dysprosium, and terbium—as well as three critical minerals: gallium, scandium, and germanium. On July 10, Ramaco CEO Randall Atkins told media: 'We intend to mine in Wyoming, process in Wyoming, and sell to U.S. domestic customers—including the federal government.' A consultancy report released this week estimates full-scale development of the mine and processing facility would cost about USD 500 million, with costs recouped within five years if rare earths are successfully mined and sold. Should the DoD’s price-floor guarantee extend to other U.S. rare earth facilities, the payback period would shorten to three years—rendering rare earth investments more profitable than many other manufacturing sectors. Third, building a 'Western industrial chain alliance': G7 + Quad coordination. The U.S. is not merely reshaping its *domestic* supply chain—it seeks to construct a globally coordinated rare earth supply system progressively decoupled from China.

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