MTL Index Intends to Take Advantage of the Market Recovery in Rare Earths

In February, the trend which began at the end of last year was confirmed. The prices of rare earths are rising again. MTL Index, the European investment specialist in strategic metals and rare earths, forecasts that this is the ideal time to get into the market.

In January, the price index had already increased by 4.3%. February saw a new rise of 8.3%, which we can attest to. MTL Index thinks that this progression heralds a sustainable market recovery which could continue for the rest of the year. The increase in demand can already be seen outside of China, which is the primary consumer. The vigor of the American manufacturing recovery is primarily responsible for this increase in demand. The United States should be followed by China during this year, while Beijing is increasing its investment in renewable energies. In 2014, China had already become the world's leading investor in this sector, with a 90 billion dollar investment. Furthermore, Beijing is the market leader in wind energy, with the installation of 23 GW in 2014. However, one must keep in mind that a wind capacity of 1MW consumes around 600 kilos of permanent magnets.

MTL Index, above all, is using the limited size of the rare earth market to forecast a rapid price recovery. Chinese production of dysprosium oxide already corresponds more or less to the volumes of magnets consumed by the Chinese sector alone. This is explains why in February, Beijing, launched a new round of rare earth storage via the State Bureau of Material Reserve (SBMR). In February, Hitachi, a Japanese magnet manufacturer, formed a joint-venture with the Chinese magnet manufacturer, Beijing Zhong Ke San Huan Hi-Tech, to protect against rising prices and in order to maintain access to metals.

Rise in exports of heavy rare earths

According to Chinese customs authorities, rare earth exports nonetheless dropped in January, by 49% compared with January 2014. This can be explained by the fact that the market, more than ever, continues to be divided between heavy rare earths and light rare earths. MTL Index specializes in heavy rare earths, exports of which have increased significantly. For example, exports of heavy rare earths increased 324% in January 2015 alone. The 20% price increase in dysprosium and the 47% price increase in terbium is noteworthy; however, exports in light rare earths decreased in January. This decrease can also be accounted for by the 'wait-and-see' attitude of Chinese manufacturers, as Beijing should, in the next few months, introduce a new tax system which is intended to replace the export quotas system.

The original source-language text of this announcement is the official, authoritative version. Translations are provided as an accommodation only, and should be cross-referenced with the source-language text, which is the only version of the text intended to have legal effect.

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Contact information

MTL INDEX
Press contact:
Miguel Angel, +33 6 67 02 75 28
www.mtlindex.com