China's Baogang Increases Rare Earth Concentrate Prices for Q1 2025

Baogang

Baogang, a leading Chinese steelmaker, has announced a price increase for its rare earth concentrate supplies to Northern Rare Earth (NRE) for the first quarter of 2025. This marks a continuation of the upward price trend observed throughout 2024.

Price Hike Details

The newly agreed benchmark price for January-March delivery is set at 18,618 yuan/dry metric tonne (dmt) ($2,539/dmt) for 50% rare earth oxide (REO) content, excluding the 13% value-added tax (VAT). This represents an increase from the fourth quarter of 2024's price of 17,782 yuan/dmt.  The selling price will be adjusted by 372.36 yuan/dmt for each 1% change in REO content.

This latest price adjustment reflects an 11% rise compared to the third quarter of 2024, when the benchmark price stood at 16,741 yuan/dmt.  This sustained upward trajectory highlights the growing demand and potentially tightening supply dynamics within the rare earth market.

Background and Industry Implications

Baogang, owner of the Bayan Obo mine in Inner Mongolia, one of the world's largest rare earth mines with 35 million tonnes of REO reserves, exclusively supplies its rare earth concentrate to NRE for REO production.  The close relationship between the two companies is further cemented by their shared major shareholder, Baotou Steel, which holds a 36.66% stake in Baogang and a 55.02% stake in NRE.  This interconnected structure significantly influences the rare earth supply chain in China and globally. The price increase implemented by Baogang could have ripple effects throughout the rare earth industry, potentially impacting downstream manufacturers reliant on these critical materials.  It also underscores the strategic importance of rare earth elements and the pricing power held by key players in the sector.