The Crisis of Myanmar’s Rare – earth Supply
Myanmar’s Disruptive Impact on Rare – earth
Myanmar’s situation has led to a halt in local rare – earth mining and border closures, impeding imports. Myanmar mainly has medium – heavy rare – earth ionic ores, with its 2023 raw ore production accounting for 11% globally. Myanmar is one of the crucial sources of rare – earth raw materials for our country. From January to September 2024, China imported 31,000 tons of rare – earth oxides from Myanmar, accounting for 74.9% of the total oxide imports during the same period. The shutdown of mines in Myanmar and the supply constraints of domestic medium – heavy rare – earth due to environmental protection and other reasons may lead to a shortage in the supply – demand pattern of medium – heavy rare – earth.
Myanmar’s Significance in Rare – earth Supply
Myanmar is the third – largest global producer of rare – earth raw ores and an important source of rare – earth raw materials for China. With the escalation of the situation in Myanmar, on October 23, the Kachin Independence Army in Myanmar announced that it had taken control of the country’s rare – earth mining areas, halting local rare – earth mining. According to SMM, upstream miners have reported that the situation has led to border closures, and Myanmar’s rare – earth ores are temporarily unable to enter the country. Myanmar mainly has medium – heavy rare – earth ionic ores. According to the USGS, Myanmar’s rare – earth raw ore production accounted for 11% in 2023. Myanmar is also an important source of rare – earth raw materials for China. According to the General Administration of Customs, from January to September 2024, China imported 31,000 tons of rare – earth oxides from Myanmar, a 3% year – on – year decrease, accounting for 74.9% of the total oxide imports during the same period. During the same period, China imported 8,537 tons of rare – earth compounds from Myanmar, a 57.5% year – on – year decrease, with a proportion reaching 49%.
The Risk of Raw Material Shortage for Smelters
A short – term customs closure has a limited impact on separation plants. On the one hand, the supply of rare – earth ores in Laos remains stable. According to the General Administration of Customs, from January to September 2024, China imported 6,749 tons of rare – earth oxides from Laos, accounting for 16.3% of the total oxide imports during the same period. On the other hand, at the end of September, the Myanmar government implemented preferential resource fee policies for miners, resulting in a surge in ionic ore imports at the end of September. Therefore, domestic smelting and separation plants still have raw material inventories. However, according to SMM research, separation plants have indicated that if the customs closure lasts for more than two months, it may lead to a shortage of their raw material supply. We believe that the escalation of the situation has a significant impact on mine labor, water, electricity, and other materials, and it is difficult to resume supply within the year. However, the progress of the situation requires attention.
The Improvement of Industry Prosperity and Supply – demand Relationship
Since 2024, rare – earth prices have continued to fluctuate and seek a bottom. In the third quarter of 2024, rare – earth prices have approached the cost line of some high – cost mines, establishing the bottom of industry prosperity. The second batch of total control indicators for rare – earth mining and smelting separation in 2024 has been issued. This year, the cumulative mining and smelting indicators have increased by 5.88% and 4.16% year – on – year respectively, with the growth rates dropping by 15.5 percentage points and 16.6 percentage points year – on – year respectively. The decline in the growth rate of domestic quotas combined with disturbances in overseas supply has shown a contraction trend in the growth rate of the global rare – earth supply side. At the same time, the demand in emerging fields such as new energy vehicles and humanoid robots in the downstream is expected to maintain a high – speed growth trend. We estimate that the global praseodymium – neodymium oxide supply – demand balance / demand ratio in 2025 – 2026 will be – 2.6% / – 2.7% respectively, and the global dysprosium – terbium oxide supply – demand balance / demand ratio during the same period will be – 6.5% / – 5.3% respectively. We believe that the industry prosperity is expected to recover, and the supply – demand relationship is expected to improve.
