What Are the Main Factors Influencing the Price Volatility of Dysprosium?

Abstract

The price volatility of dysprosium (Dy) is primarily influenced by multiple factors, including supply-demand dynamics, policy regulations, international competition, and industrial chain restructuring. Recently, the price of dysprosium oxide (Dy₂O₃) plummeted by 7,500 yuan per ton in a single day (reaching 1.4075 million yuan/ton on December 8, 2025), reflecting the interplay between relaxed export policies (e.g., the implementation of general export licenses) and the expansion of magnet production capacity in Europe. In the long term, domestic mining quotas (China’s 2025 rare earth mining cap set at 110,000 tons), environmental regulations, and structural demand growth from emerging sectors (e.g., new energy, robotics) collectively shape dysprosium’s volatile pricing trends.

1. Core Influencing Factors

(1) Policy Regulations: Resource Control & Export Policies

1. Domestic Production Constraints
   • China enforces strict rare earth mining quotas, with the 2025 cap fixed at 110,000 tons, while heavy rare earths (e.g., Dy) are allocated based on demand. Environmental audits in key mining regions further constrain supply flexibility.
   • Green smelting technology upgrades raise production costs, limiting small and medium enterprises’ output and increasing industry consolidation, amplifying price sensitivity.
2. Export Policy Adjustments
   • The 2025 general export license (covering major producers like JL Mag) streamlined procedures, cutting delivery times by 30%-50%, temporarily easing inventory pressure and causing price corrections.
   • While relaxed policies and “civil-compliant export” incentives boosted overseas orders, Europe’s local magnet production (e.g., Germany’s rare-earth magnet projects) weakened China’s export pricing power.

(2) Supply-Demand Dynamics: Structural Imbalance & Emerging Demand

1. Supply-Side Fluctuations
   • Overseas supply chains (e.g., Myanmar) face instability due to geopolitical conflicts, while domestic refining capacity is constrained by technological upgrades. These factors drove a short-term price surge to 1.96 million yuan/ton (October 27, 2025).
   • Earlier overproduction led to temporary oversupply (e.g., Dy₂O₃ prices dropped in November 2025 due to declining phosphor demand), triggering market sell-offs.
2. Demand-Side Shifts
   • Traditional sectors: LED adoption reduced phosphor demand, while consumer electronics markets saturated.
   • Emerging sectors: New energy vehicles (higher magnet content per unit), wind turbine upscaling, and humanoid robotics drive demand for high-performance Dy-containing NdFeB magnets. However, low-dysprosium magnet R&D may cap long-term price growth.

(3) International Competition & Industrial Chain Restructuring

• Global supply chain shifts: The EU’s Critical Raw Materials Act and U.S. localization efforts weaken China’s pricing leverage, while China counters with green smelting certifications to strengthen its industrial influence.
• Trade rule changes: Export controls and foreign market barriers push firms toward high-value products, but trade disputes heighten price volatility risks.

2. Price Transmission Mechanisms

1. Short-Term Volatility Triggers
   • Policy shifts (e.g., license issuance) alter market expectations—December 2025’s price crash reflected traders’ inventory liquidation.
   • Speculative trading magnifies price swings, especially during low-inventory periods (e.g., October 2025’s record-low social stocks).
2. Long-Term Pricing Logic
   • Cost floor: Rising environmental and mining costs limit downside risks.
   • Demand elasticity: If new energy demand outpaces forecasts (e.g., 2026 wind power capacity surge), prices may rebound sharply.

3. Future Trends & Challenges

1. Range-Bound Volatility
   • Short-term prices may fluctuate between 1.4–2.0 million yuan/ton, influenced by quota policies and restocking cycles.
   • Breakthroughs in recycling tech (e.g., magnet scrap recovery) could ease primary Dy supply pressures.
2. Strategic Reassessment
   • Dy’s price volatility mirrors the global green economy race. Firms must adopt nano-level purification to mitigate supply risks, while policymakers balance resource security and industrial globalization.

Conclusion

Dysprosium’s price swings stem from policy shifts, supply-demand imbalances, and geopolitical competition. Short-term movements are driven by inventory cycles and market sentiment, while long-term trends hinge on new energy demand and resource scarcity. Future price trajectories will depend on substitution technologies (e.g., low-Dy magnets) and global supply chain resilience.