Tungsten and Rare Earths Lead the Rally! Small Metals Under Strategic Reassessment

On Wednesday, the rare earth and small metals sectors performed strongly, with Eastern Tantalum, China Tungsten High-tech, Xianglu Tungsten, and Greenmei hitting the daily limit-up.

Recently, prices for small metal varieties have increased, with tungsten leading the gains, attracting market attention. Huayuan Securities’ research report shows that as of February 6 this year, the price of black tungsten concentrate surged over 47% to 671,000 yuan per ton, hitting a new record high.

Huayuan Securities stated that this price increase is not accidental but the result of both active and passive supply contractions resonating: domestic mines are experiencing reduced operating rates and shipments due to dual constraints of safety management and environmental protection requirements, leading to tight spot market circulation; meanwhile, demand in downstream sectors such as PCB tools remains robust, with essential procurement supporting prices. Additionally, some companies further raised long-term contract prices in January, reinforcing bullish market expectations.

Furthermore, rare earths also hit new highs. According to Nikkei Chinese Web on February 10, dysprosium and terbium in rare earths both reached new highs compared to comparable data since 2015 for two consecutive weeks.

Huayuan Securities’ research also shows that the supply shortage pattern has intensified, with praseodymium-neodymium oxide breaking through new highs. As of February 6 this year, praseodymium-neodymium oxide increased 26% to 758,000 yuan per ton.

Huayuan Securities indicated that on the supply side, policy and supply constraints support continued tightness, with spot supply of praseodymium-neodymium oxide remaining scarce and upstream holders less willing to sell at low prices. On the demand side, downstream magnetic material companies have shifted from just-in-time procurement to stockpiling. Baogang Steel and Northern Rare Earth’s rare earth concentrate trading prices in the first quarter increased by 2.4% month-on-month, supporting the upward movement of the rare earth price center.

Great Wall Securities stated that the valuation of strategic metals is ongoing, maintaining the “outperform the market” rating for the small metals sector. Following strategic metal policies, the preferred sectors are rare earths and tungsten. For rare earths: export controls are tightening, which is expected to drive prices higher in the short term; long-term demand (new energy vehicles, wind power, robotics) remains positive under supply constraints, with clear medium- and long-term sector trends. For tungsten: tight supply and demand, combined with rising strategic metal hoarding sentiment, continue to push tungsten prices upward.

(Source: Oriental Wealth Research Center)