Rare Earth Prices Hold at Elevated Levels as China Export Controls Remain Fully in Force

Rare earth prices are holding at historically elevated levels through late July 2026, with no signs of the export-driven rally losing momentum. China's export control regime, imposed in April 2025 under MOFCOM Announcement No. 18, covers seven medium and heavy rare earth elements — samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium — as well as all oxides, metals, alloys, and downstream products containing them, including neodymium magnets containing dysprosium or terbium.

The controls remain fully in force as of July 2026. Every shipment of dysprosium, terbium, or neodymium-praseodymium (NdPr) material from China requires a MOFCOM export license. There has been no signal from Beijing that it intends to ease the restrictions, despite repeated diplomatic engagement from the United States, European Union, and Japan.

NdPr alloy reached US$133/kg on July 1, 2026, according to CREIA and SMM data, representing a 21% jump in June alone and a cumulative 130-140% increase year-to-date. The rally reflects both restricted export availability and strong demand from electric vehicle and wind turbine manufacturers, who rely on NdFeB permanent magnets for their drivetrains and generators.

Dysprosium oxide is trading at US$119-123/kg in China, while terbium oxide sits at US$210-216/kg — both more than double their levels from early 2025. Dysprosium metal, used in high-temperature magnet grades for aerospace and defense applications, is priced at approximately US$930/kg FOB China, reflecting the heavy rare earth premium.

On the supply side, Lynas Rare Earths continues to ramp production at its Kalgoorlie and Mt Weld operations in Australia and its new processing facility in Kalgoorlie, which began phased commissioning in late 2025. MP Materials in the United States is also expanding downstream processing capacity at its Mountain Pass facility in California. However, both remain years away from achieving meaningful heavy rare earth separation capacity to offset China's dominance. China processes approximately 90% of global rare earths into oxides and metals, and nearly 100% of heavy rare earths.

Market analysts see limited downside risk to prices through the remainder of 2026. The supply-demand imbalance for magnet-grade rare earths is structural, not cyclical. Even a moderate demand slowdown in EVs or wind energy would be absorbed by export license constraints that prevent Chinese producers from freely selling into international markets.

Bull case: Further export tightening and continued EV adoption push NdPr alloy above US$150/kg in H2 2026. Bear case: A broad economic slowdown reduces rare earth demand, but export controls keep a floor under prices. Base case: NdPr holds US$120-140/kg through Q3, with seasonal restocking in Q4 providing a mild upside catalyst.