Advertisement

Market Update

Executive summary (20-second highlights):

Lynas now sells more than half its output under price floors and does not say how much of that book is Japanese or US state money and how much is customers. That split is the number to watch in Rare Earths this quarter.
In Q3 2026 the ex-China NdPr spot fell below the US$110/kg floor and was still under it in September, yet floors now cover more than half of Lynas' production. Buyers holding them appear to be paying for something the spot market does not sell.
In our register of filed floors, every one with a published level has a state behind it. The commercial floors publish no level at all, so investors can see neither the premium nor the credit behind it.
Ghana approved the transfer of a Lithium project and its offtake rights to a Chinese buyer with no terms reported. The only regulatory approval still pending in this week's deals is China's, and it governs the Chinese buyer's money.
Two Chinese export-control clocks run out this month, and the one that names the United States is the second.
Three Copper mines lost tonnes in one week while London fell. The outright price traded the macro; the tightness shows in the LME spread and appears to be paid for inside China.

Illustration of Australia's Parliament House

Half of Lynas' output now sells against a floor

A floor price used to be a state instrument.

In July 2025 the US Department of War agreed to pay MP Materials the shortfall whenever the NdPr benchmark falls below US$110/kg, for ten years, and to take 30% of anything above it once the company's magnet plant runs at full capacity.

In April 2026 USA Rare Earth disclosed that a vehicle capitalised by US government agencies and private capital holds a 15-year offtake for all of Serra Verde's Phase 1 output in Brazil, with floors of about US$110/kg for Neodymium and Praseodymium, about US$575/kg for Dysprosium and about US$2,050/kg for Terbium. Both rest on government money.

So the standard reading of a Western floor has been: the state underwrites supply that cannot survive at the Chinese price, and when the floor is in the money, the taxpayer pays.

On October 29 Lynas reported that its price gains include "floor price agreements which now cover over 50% of Lynas' production". It named no counterparty and no level.

What Lynas has disclosed fills in part of the book:

On March 10 it agreed a US$110/kg NdPr floor "for sales to Japanese industry" with JARE, a special purpose company set up by Japan Organization for Metals and Energy Security (JOGMEC), the state minerals agency, and the trading house Sojitz. The agreement carries a firm commitment to buy 5,000 tonnes of NdPr a year, to 2038, and an annual review of "the sustainability of the agreement, including sufficiency of funding".
On March 16 it signed a binding letter of intent with the US Department of War for about US$96M of light and heavy oxides over four years, at the same NdPr floor, with the definitive agreement still to be finalised.
The October report adds customers: original equipment makers (OEMs) "continue to seek to lock in contracts for direct rare earth supply", and face "the requirement to pay pricing independent of the market index, including acceptance of floor prices". Lynas' interim chief executive, Pol Le Roux, told analysts, as quoted by The Northern Miner: "There is a real strategy from OEMs to secure part of their supply from outside China".

Here is the problem with the headline number. Lynas does not say whether "production" means NdPr or all rare earth oxide (4,254 tonnes in the quarter).

On our arithmetic, the JARE commitment alone is about 60% of NdPr output at the September-quarter rate of 2,082 tonnes, or about 29% of total oxide output, if it is running at that pace, which Lynas has not said.

On either measure, the "over 50%" could be mostly Japanese state money, with customers a minority. Lynas' wording says commercial floors exist. It does not say how big they are.

That leaves two readings with different winners:

If the book is mostly JARE and the Department of War, this is the old story with a new payer.
If customers hold a real share, something new is happening: buyers paying above the market without a government making them.

The August print is the reason to take the second reading seriously.

The third-quarter print

Benchmark Mineral Intelligence's ex-China NdPr oxide assessment (CIF Europe and North America) fell more than 13% in August, to about US$95/kg by August 20, and recovered 12% in September to an average of about US$106.5/kg, still below the US$110/kg floor.

This is the same quarter Lynas reported on.

Figures were presented as US$/t

Benchmark attributes the fall to non-Chinese producers, "wary of the reputational sensitivity of selling into China", sending volume into an oversupplied ex-China market, a surplus it now describes as "stabilising".

Inside China it assessed the oxide at an average of RMB 729,500/tonne (about US$108.7/kg) in September, without saying whether that figure includes Chinese VAT.

❝

From this moment on, the content is for CMJ premium subscribers

Enjoy your 7-day FREE trial and continue reading now