Foreign media analysts said on Thursday that Chinese rare earth prices have surged to their highest level in 16 months after Myanmar suspended mining...
The latest data provided by the Shanghai Metal Market (SMM) on LSEG Eikon showed that the price of dysprosium oxide jumped to 2,610 yuan ($356) per kilogram on Wednesday, the highest level since May 2022.
The price of terbium oxide rose to 8,600 yuan per kilogram, a new high since July 3.
Mines in the Bangwa region of Kachin state, Myanmar's largest rare earth producer, have been closed since Monday in preparation for inspections this week, consultancy SMM said in a report on Thursday.
SMM analyst Yang Jiawen said: "A local miner said they have not resumed production and are waiting for the next step of notification from the inspection team."
Rare earths are a precious group of 17 minerals used in consumer electronics and military equipment.
Chinese trade data shows that Myanmar accounted for 38% of China's rare earth imports from January to July this year, while data from the US Geological Survey shows that the Southeast Asian country is the fourth largest source of rare earth mining in 2022.
A local resident in Chipwi town told Reuters she saw workers from the nearby town of Pangwa coming to her town as mining activities were suspended.
David Merriman, an analyst at Project Blue, said Chinese processors expected disruptions in feedstock supplies from Myanmar of one to three weeks, which was unlikely to affect the supply-demand balance in 2023.
Consumers stock up ahead of peak months
However, Merriman expects prices to rise in the short term due to uncertainty and suppliers hoarding materials in anticipation of higher prices.
Merriman added: "A prolonged mining shutdown in Kachin State could cause considerable damage to southern China's refineries that rely on feedstock from Myanmar, although increased imports from Laos may mitigate this to some extent."
SMM's Yang said some rare earth consumers are hoarding goods in preparation for China's public holiday from September 29 to October 6, fearing rising prices. Expectations of improving demand during peak consumption periods in September and October also boosted rare earth prices.
Concerns about potential supply disruptions due to environmental inspections in Jiangxi province at the end of August also contributed to price increases, she added. Jiangxi Province is one of China's major rare earth production centers.
Chinese trade data shows that China’s imports of rare earths surged 76% year-on-year to 12,673 tons in August, and imports in the first eight months increased 54.4% to 118,426 tons.
