RARE EARTHS: Higher-priced dysprosium, terbium oxide trade the focus in Sept CIF North America REEs

Intra-trade dysprosium and terbium oxide spot business has been the main focus in the CIF North America rare earths market so far this month, market participants said.

In early September, a European trader received a bid for 200 kg of dysprosium oxide at $3,000/kg CIP (air freight) North America, which was rejected. The trader subsequently sold at $3,250/kg CIP to a trader in the US.

The Platts monthly assessment for dysprosium oxide in August, published on Aug. 31, was $2,300/kg CIF North America, unchanged from July.

The material was legacy Chinese origin, exported from China before the country's export restrictions on heavy rare earths were introduced, and market participants said there was a finite supply of that origin.

Having rejected the $3,000 bid, the trader said, "I don't think we'll see $3,000 again any time soon [it is] looking like it will continue to climb."

A second trader said he was not surprised the $3,000/kg bid had been rejected. "The problem is, it doesn't matter whether it's $3,000, $3,500, $4,000 or $5,000, you can bid at any of those prices, but it's meaningless if nobody is willing to accept them, let alone put a number on a counter offer. And they're not making offers to sell," the trader said.

The trader also said there were quality issues, even with legacy China origin. "Even with legacy material, there is moisture content to consider, particle size, and so on," the trader said. "What used to be a lab quantity is now a commercial quantity, so it could be in the hundreds of kilos... or a shopping bag full."

He said quality could vary even from the same producer. "Even a producer processing the same feed can be producing a different chemistry now compared with what he was producing an hour ago. That's why you're hearing these huge price ranges," the trader said.

A third trader expressed doubt about the high prices being discussed for terbium oxide. "A bid for dysprosium at $3,000/kg fits with what we are hearing, though the whole story is just that – a story," the trader said before the trade was reported. "These big numbers are being talked about, but nothing is getting done at these prices. It is part of the price discovery process, but not more sophisticated than just throwing numbers out at each other. Occasionally, something happens."

He said the big spreads pointed to illiquidity. But he also said the high prices reflected the dwindling supply of heavy rare earths. "The bottom line on all the heavies is that sooner, not later, the legacy Chinese origin heavies will be gone, with nothing from outside China to replace them, and the lack of processing outside of China means not everyone downstream of that is going to get supplied," the trader said.

In terbium oxide, after stable pricing over July and August, a trade of 200 kg was reported at $7,500/kg CIP. The Platts assessment for terbium oxide was $4,900/kg in August, unchanged from July, with price indications heard in the market at $4,800-$5,000/kg,

Commenting on that spread, before the trade was reported, the second trader said, "You could bid double that and still not get anyone to sell to you. So seeing a $5,000-$10,000/kg range wouldn't surprise me."

The trader said there was also a lack of price discovery, "because we don't know if anyone genuinely has any to sell, and the same arguments about particle [and chemistry] all come into play."

Indications on neodymium-praseodymium oxide were flat, with one producer putting the price at or close to the $110/kg CIF North America level, while a trader put the floor of the market at $115-$120/kg. No business was heard. The Platts assessment for NdPr oxide was $110/kg CIF North America in August, down from $115/kg in July.

The market consensus is that unlike the heavy rare earths, NdPr oxide of non-Chinese origin is appears to be in supply/demand balance.

No fresh indications were heard on samarium oxide. the Platts assessment was unchanged at $800/kg CIF North America in August.

Platts is part of S&P Global Energy.