Rare Earth Elements
Rare earth elements (REEs) are a group of 17 metallic elements critical for permanent magnets (NdFeB), EV motors, wind turbines, defense systems, and electronics. China dominates production and processing, though diversification efforts are expanding mines in Australia, the US, and Myanmar.
Rare Earth Elements at a Glance
What Moves Rare Earth Elements Pricing
Rare earths trade as oxides (NdPr oxide, dysprosium oxide, terbium oxide) and metals. Pricing references Asian Metal and Shanghai Metals Market for Chinese FOB equivalents. China controls ~85% of separation and processing capacity — Chinese export quota and tax adjustments swing global pricing. NdPr is the dominant value driver for permanent magnet motors (EVs, wind turbines). Heavy rare earths (dysprosium, terbium) are scarcer and higher-priced, used in high-temperature magnets.
How Rare Earth Elements Cargoes Are Priced and Settled
Cargoes are 1-25 tonnes for oxides, much smaller than industrial commodities. Pricing is per kg of contained REO (rare earth oxide) at the contracted purity. Long-term offtake agreements are the norm; spot market is shallow. Letter of credit and open account both used; payment terms reflect strategic supply relationships.
Rare Earth Elements Specifications and Dispute Practice
Purity grades: 99.0%, 99.5%, 99.9%, 99.99% (4N), 99.999% (5N). Magnet-grade NdPr typically 99.5-99.9%. Disputes turn on contained REO assay, which requires ICP-MS analytical work — 2-3 week turnaround creating cargo settlement delays.
Where Rare Earth Elements Comes From and Where It Goes
China dominates mining (Inner Mongolia Bayan Obo, Sichuan, Jiangxi), separation, and metal/alloy production. Outside China: Lynas (Australia, with Malaysian processing), MP Materials (US, with Chinese processing dependency), Iluka, and emerging projects in Greenland, Vietnam, and Brazil. End-use concentration in Japan, Korea, and increasingly the US (EV and wind supply chain on-shoring).
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