The weak rare earth market is waiting for the news of inventory consolidation as a stimulant. Yesterday afternoon, the National Development and Reform Commission convened a meeting of senior executives from six major rare earth groups to discuss rare earth national reserves. This is the first meeting convened by relevant parties after the failure of the rare earth national reserve bidding meeting on the 7th of this month, and the content directly refers to the negotiation of rare earth oxide products that had not reached an agreement before.

In June, when rare earth prices were weak and declining, the trend of the national reserve policy affected the market's nerves. From a fundamental perspective, June to August is the off-season for the industry, with weak downstream demand. Without the stimulus of storage policies, prices will still decline, "Zhao Dan, a rare earth analyst at Shanghai Nonferrous Metals Network, told reporters.

Data shows that the prices of rare earth products have mostly rebounded in the past month, with prices of terbium oxide, dysprosium oxide, lanthanum oxide, and praseodymium neodymium oxide falling by 8.33%, 5.38%, 11.54%, and 3.31%, respectively.

As a national strategic metal variety whose total mining volume is limited by indicators, the price of rare earths has always been influenced by policies such as national storage and cracking down on illegal activities. With the dual support of commercial and national reserves, the rare earth market has experienced a wave of growth this year. The rare earth permanent magnet index rose from a low of around 2500 points at the beginning of the year to 4219.35 points yesterday, an increase of about 68%, and a single month increase of 20% in May.

Looking at the trend this year, rare earth prices finally experienced a sharp rise in April after the lukewarm market in the first three months. And what triggered this round of surge was the landing of the commercial reserve news.

On March 30th, the National Development and Reform Commission, together with relevant departments, organized a mobilization meeting for rare earth enterprise commercial reserves. The quantity and price were determined at the bidding meeting on April 5th, and the commercial reserve reached 5200 tons, divided into three batches. The reporter learned that the first batch of 1300 tons and the second batch of 1600 tons have been implemented.

The promotion of commercial storage has stimulated rare earth prices, coupled with export and order support, the prices of various rare earth varieties generally rose in April. Among them, the northern lanthanum oxide showed a larger increase, with a monthly increase of over 42%. Varieties such as dysprosium oxide, terbium oxide, and praseodymium neodymium oxide rose by 5%, 8.9%, and 2.7% respectively.

After the commercial reserve, the key indicator of the market is the progress of the national reserve. The purpose of Shangchu is to prepare for Guochu. If Guochu's bidding can pass, the market will have a bright future. If it fails, it will be a different situation, "said Du Shuaibing, a rare earth analyst at Baichuan Information.

On June 7th, the State Reserve held its first bidding meeting of the year, and as a result, all 9 major varieties failed the bidding due to prices lower than the psychological price range of enterprises. After the news came out, the capital market turned bearish. The next day, the A-share rare earth permanent magnet sector fell in response, with a cumulative decline of 5.4% for two consecutive trading days. The net outflow of funds in this sector for the week was 3.848 billion yuan.

However, in terms of rare earth national reserves, Du Shuaibing believes that this failed bid is not a bad thing. If the bid is won, it means that the upward trend of the product in the future market is locked in. Conversely, if the bid is missed, it means that the bidding price is too low, indicating that there will be opportunities for rare earth prices to rise in the future, and its trend is stronger

The current sluggish market is still waiting for new developments from the National Reserve. After the hopes of the bidding meeting on the 7th were dashed, the meeting held by the National Development and Reform Commission on June 22nd reignited market expectations. Yesterday, the rare earth permanent magnet sector closed slightly up 1.34%, with 19 out of 25 listed companies rising.

Several industry insiders interviewed by reporters have stated that the rare earth industry experienced a historical downturn last year. From the perspective of physical enterprises, it was difficult for them to bear further price declines, and the demand side was unlikely to see significant improvement. Therefore, the progress of the national reserve bidding reform on the supply side will have a decisive impact on the market.

But the healthy development of an industry cannot rely on policy driven storage to dominate the market in the long run. Just relying on collecting and storing for a while to make some quick money, but this is not sustainable in the long run. Downstream applications and demand still need to keep up, "said Chen Ruirui, a metal analyst at Ruidao.