Two major rare earth giants announce price increase

The two leading rare earth companies have raised the associated transaction prices of rare earth concentrates for the sixth consecutive time. After the market closed on January 9, Northern Rare Earth and Baogang Co., Ltd. announced plans to adjust the associated transaction price of rare earth concentrates for the first quarter of 2026 to RMB 26,834 per ton (dry weight, REO=50%), an increase of 2.4% month-on-month. For every 1% change in REO (rare earth oxide), the pre-tax price will increase or decrease by RMB 536.68 per ton. Previously, Northern Rare Earth adjusted the transaction price of rare earth concentrates for the fourth quarter of 2025 to RMB 26,205 per ton (dry weight, REO=50%), an increase of 37% month-on-month. For every 1% change in REO, the pre-tax price will correspondingly increase or decrease by RMB 524.10 per ton. Since the third quarter of 2024, the transaction price of rare earth concentrates has been raised six consecutive times. The transaction prices for the previous six quarters were RMB 26,205 per ton, RMB 19,109 per ton, RMB 18,825 per ton, RMB 18,618 per ton, RMB 17,782 per ton, and RMB 16,741 per ton, with month-on-month increases of 37.1%, 1.5%, 1.1%, 4.7%, and 6.2%, respectively. Northern Rare Earth and Baogang Co., Ltd. are both subsidiaries of Baogang Group. According to Tianyancha data, Baotou Iron and Steel (Group) Co., Ltd. holds 38.03% of the shares of Northern Rare Earth, while its holding ratio in Baogang Co., Ltd. is 55.38%, making it the controlling shareholder of Baogang Co., Ltd. The pricing mechanism for the transaction of rare earth concentrates between Northern Rare Earth and Baogang Co., Ltd. is executed according to the proposal on the pricing mechanism for daily related transactions of rare earth concentrates and the execution for 2022 and the forecast for 2023, which was approved at the first extraordinary general meeting of shareholders of Northern Rare Earth in 2023. Starting from April 1, 2023, under the condition that the pricing formula for rare earth concentrates remains unchanged, the company will calculate and adjust the price of rare earth concentrates in the first ten days of the first month of each quarter according to the pricing formula, and re-sign the supply contract or supplementary agreement for rare earth concentrates and announce it. Currently, this pricing mechanism is operating stably. According to the announcement from Baogang Co., Ltd., the Baiyun Obo mine owned by its controlling shareholder Baogang Group is a world-renowned resource treasure trove, with a cumulative identified resource of 1.26 billion tons of iron ore; the largest rare earth resource in the world; niobium resources ranking second in the world, only after Brazil; and the largest associated fluorite resources in the country. Baogang Co., Ltd. has the rights to develop the resources of the Baiyun Obo mine. After purchasing rare earth concentrates from Baogang Co., Ltd., Northern Rare Earth will smelt, separate, and process them, forming a closed-loop industrial chain from upstream mining and selection to midstream processing and then to the production of rare earth permanent magnetic materials. This adjustment in the price of rare earth concentrates may be influenced by changes in the prices of rare earth products in the market. For example, on January 9, the domestic average price of praseodymium-neodymium oxide was RMB 626,000 per ton, and the price of metallic praseodymium-neodymium was RMB 765,000 per ton, which is an increase of 11.0% and 11.5% compared to a quarter ago Shanghai Securities Journal Risk Warning and Disclaimer The market has risks, and investment should be cautious. This article does not constitute personal investment advice and does not take into account the specific investment goals, financial situation, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article are suitable for their specific circumstances. Investment based on this is at one's own risk