Baogang, a prominent Chinese steelmaker based in Baotou, has announced a price hike for its rare earth concentrate supply to Northern Rare Earth (NRE) for the first quarter of 2025. This move continues the upward price trend seen throughout 2024.
Price Increase Breakdown
The new 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. This price excludes the 13% value-added tax (VAT). It is an increase from the fourth quarter of 2024 price of 17,782 yuan/dmt. The price will be adjusted by 372.36 yuan/dmt for every 1% change in REO content.
This latest adjustment is an 11% increase compared to the third quarter of 2024. During that period, the benchmark price was 16,741 yuan/dmt. This consistent upward trend signals growing demand and potentially tightening supply in the rare earth market.
Industry Context and Implications
Baogang, which owns the Bayan Obo mine in Inner Mongolia, exclusively supplies its rare earth concentrate to NRE for REO production. This mine is one of the world’s largest rare earth mines with 35 million tonnes of REO reserves. Their close relationship is reinforced by their shared major shareholder, Baotou Steel. Baotou Steel owns 36.66% of Baogang and 55.02% of NRE. This interconnected structure significantly impacts the rare earth supply chain both in China and globally. Baogang’s price increase could have widespread effects across the rare earth industry. It may potentially affect downstream manufacturers who rely on these crucial materials. It also highlights the strategic importance of rare earth elements. Moreover, it underscores the pricing influence of key players in the sector.
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