China's Rare Earth Exports Increase Amid Price Decline, Driven by Strong NEV Production

China's rare earth exports saw a notable increase in the first seven months of 2024, bolstered by declining prices that spurred international demand for the strategically critical materials.

According to customs data, China's rare earth exports from January to July rose by 7% compared to the same period last year, reaching a total of 34,032 tons. This growth in exports was largely attributed to a significant drop in average export prices, which fell to $8,826 per ton from $15,985 per ton a year earlier. The lower prices have attracted more overseas buyers, who are capitalizing on the opportunity to secure China-origin rare earth materials at reduced costs.

In July alone, China's rare earth exports increased by 2% from the previous month to 4,937 tons. However, this figure represents a 9% decline compared to July of the previous year. The average export price for July was $8,952 per ton, reflecting a slight 1% decrease from June and an 11% drop from July 2023.

The rise in exports coincides with robust growth in China's new energy vehicle (NEV) sector. In June, China produced 1.003 million NEVs, marking a 28% increase from the previous year and a 6.7% rise from May. NEV sales also surged, climbing 30% year-over-year and 9.8% from the previous month to 1.049 million units. Over the first half of the year, NEV production totaled 4.929 million units, a 30% increase from the same period in 2023, with sales reaching 4.944 million units, up by 32%.

Despite the strong performance, growth in NEV sales showed signs of slowing in July, as competition in the market intensified. Industry participants expect this competitive environment to persist in the coming months, potentially impacting future export trends.