"China's Rare Earth Price Index rose 17.5 percent in February, climbing from 257.6 to 307.3, its highest level in nearly two years. Neodymium and praseodymium oxide prices surged 29 percent to approximately $12,100 per tonne, while heavy rare earths posted gains ranging from 1.5 percent for terbium oxide to nearly 33 percent for gadolinium oxide. Outside China, the four magnetic rare earths most critical to EV motors and defense systems have risen between 37 and 105 percent since the start of the year."
The February Numbers
Data released by the China Rare Earth Industry Association shows that China's domestic rare earth market strengthened through February 2026, with the China Rare Earth Price Index averaging 285.4 for the month, rising from 257.6 on February 1 to a peak of 307.3 on February 27, an intra-month increase of approximately 17.5 percent. The index reached its highest level in nearly two years, driven by rising prices for the magnet metals that sit at the center of the global supply chain for electric vehicles, wind turbines, and defense systems.
The gains were concentrated in the light rare earth elements that form the backbone of neodymium-iron-boron permanent magnets. Neodymium oxide averaged approximately CNY 87,170 per tonne (roughly $12,100 per tonne) in February, up 29 percent month-over-month. Praseodymium oxide tracked closely at CNY 86,940 per tonne (approximately $12,070), also up 29 percent. NdPr metal, the alloyed form used directly by magnet manufacturers, rose 9 to 10 percent to approximately CNY 399,300 per tonne ($55,450).
Heavy Rare Earths: Moderate Gains, Strategic Significance
Heavy rare earth elements, the scarcer materials added to magnets to preserve performance under high temperatures and mechanical stress, also rose during February, though the gains were more restrained than the light rare earth surge.
Dysprosium oxide averaged approximately CNY 1.48 million per tonne ($206,000), up 4.9 percent month-over-month. Dysprosium metal tracked at CNY 1.45 million ($201,000), up 4.7 percent. Terbium oxide averaged CNY 6.32 million per tonne ($878,000), up 1.5 percent, while terbium metal reached CNY 7.83 million ($1.09 million per tonne), up 1.6 percent.
The more moderate heavy rare earth gains follow a correction earlier in the year. CTIA Group data indicates that praseodymium-neodymium oxide rose approximately 18.75 percent and dysprosium oxide approximately 15.6 percent through the full month. The figures suggest that while light rare earths accelerated through February, heavy rare earths had already repriced sharply through January and were consolidating at elevated levels.
Gadolinium oxide was the outlier, jumping 32.9 percent to approximately CNY 237,000 per tonne ($32,900). Gadolinium serves specialized roles in medical imaging and nuclear applications, and the spike may reflect strategic stockpiling activity ahead of anticipated defense procurement.
Pricing Outside China: The Magnetic Four
Outside China, the pricing picture for the four rare earths most critical to permanent magnet production has been even more dramatic on a year-to-date basis.
Data from Strategic Metals Invest, a sales and marketing partner of global critical minerals trader TRADIUM, showed the following prices as of February 24. Neodymium was selling for $205 per kilogram, up 37 percent year-to-date. Praseodymium was also trading at elevated levels, tracking neodymium closely. Terbium and dysprosium recorded the sharpest gains, with prices rising over 100 percent since the start of the year, reflecting their scarcity and the ongoing supply disruptions from Myanmar, which provides approximately 60 percent of China's heavy rare earth feedstock.
The divergence between light and heavy rare earth price trajectories carries strategic importance. Light rare earth price increases improve the economics for companies building separation and processing capacity outside China. But the heavy rare earth gains are more consequential for defense and high-performance applications, where dysprosium and terbium are essential and substitution options are limited.
What Is Driving the Rally
Several factors converged to produce the February price surge.
Demand from permanent magnet manufacturers remains strong. NdFeB magnets are consumed in growing volumes by the EV sector, wind turbine producers, robotics manufacturers, and defense systems integrators. Global NdPr oxide demand is expected to grow 7.7 percent year-over-year in 2026, outpacing supply growth and extending the market deficit into a second consecutive year.
On the supply side, Chinese authorities have maintained production discipline. Northern Rare Earth and Baotou Steel announced Q1 2026 concentrate price increases that set a domestic pricing floor and anchored expectations for continued strength. Myanmar's rare earth production remains disrupted following the Kachin Independence Army's seizure of key mining hubs in late 2024, with export volumes through the first nine months of 2025 down by more than 10,000 tonnes compared to the prior year.
The February data from CREIA also noted that inventory pricing associated with Chinalco's rare earth storage system averaged CNY 242,900 per tonne in February, up 13.2 percent month-over-month, further evidence of tightening physical availability within China's domestic market.
The Ex-China Premium Takes Shape
The February price movements reinforce a structural development that has been building since mid-2025: the emergence of a two-tier pricing environment for rare earths.
Within China, prices are set by domestic supply-demand dynamics, government production quotas, and strategic stockpiling decisions. Outside China, prices increasingly reflect a security-of-supply premium as Western manufacturers and governments compete for a limited pool of non-Chinese material. The U.S. Department of Defense's guaranteed price floor of $110 per kilogram for NdPr products through its MP Materials partnership, and the broader discussion of international price floors through the newly launched FORGE framework, are formalizing what the physical market has already begun to price in: non-Chinese rare earth material commands a premium because it comes without the supply-chain risk embedded in Chinese-origin products.
For downstream manufacturers, this bifurcation creates planning challenges. Procurement teams must now track not just a single global benchmark but distinct Chinese domestic, Chinese export, and ex-China spot markets, each governed by different dynamics and carrying different risk profiles.
Outlook
The February rally leaves rare earth prices at levels not seen since mid-2022 for several key materials. The structural drivers, growing demand from EVs and renewables, constrained heavy rare earth supply from Myanmar, Chinese production discipline, and the approaching November 2026 expiration of Beijing's suspension of expanded export controls, all point toward continued price support through the first half of the year.
The risk of a correction is not negligible. The pace of the January-February rally, particularly the 100-plus percent year-to-date gains in dysprosium and terbium, has prompted some downstream manufacturers to adopt a wait-and-see approach on procurement, which could temporarily cool demand. Any improvement in Myanmar supply conditions or a relaxation of Chinese production controls would introduce downside pressure.
But the broader trajectory is clear. The rare earth market has moved from the oversupplied, low-price environment that characterized 2024 into a structurally tighter phase where prices are supported by physical scarcity, policy-driven constraints, and a level of geopolitical risk that the market is only beginning to price in fully.