Rare earths prices just hit three-year highs — why ASX stocks like LYC, ILU and ARU aren’t moving… yet

For several years now, rare earths investors have been asked to take the long view. Policy announcements came and went, equity prices whipsawed on headlines, and yet the underlying minerals markets appeared stubbornly rangebound. Over the past few weeks, however, the price of one critical rare earth oxide has surged — yesterday closing at around CNY 850,000 per tonne, its highest level since July 2022.

Yet if you looked at the share prices of ASX-listed rare earths stocks such as Lynas Rare Earths (LYC), Iluka Resources (ILU), Arafura Resources (ARU) and several others we’ll discuss later, you might not realise that a potential new bull phase in rare earths pricing is now unfolding.

Praseodymium-Neodymium (NdPr) oxide prices have climbed to their highest level in almost three years — returning to levels last seen as the sector was cooling from the extraordinary bull run triggered by Russia’s invasion of Ukraine in early 2022.

Praseodymium-Neodymium (NdPr) oxide price (RMB/mt). Watch this video to learn more about the trend ribbons 📺

The strength of the NdPr price move makes the recent sharp declines in ASX-listed rare earths stocks especially timely for investors. While rare earths prices are accelerating, equities have moved in the opposite direction — potentially creating one of the most compelling “buy the dip” opportunities the sector has seen in years.

So why have local rare earths stocks underperformed the signal coming from NdPr prices — and why is there a very real chance they begin to catch up? Read on.

A move years in the making

The NdPr chart tells a compelling story — not just about rare earths, but about how commodity price cycles tend to unfold. Prices surged to record levels in early 2022 following Russia’s invasion of Ukraine, as investors rushed to price in supply disruption, geopolitical risk, and the strategic importance of critical minerals. That surge marked the peak of the last commodity price cycle. What followed was not a failure of the long-term rare earths story, but a familiar unwind.

As with many commodity booms, high prices triggered a sharp demand response, policy intervention, inventory drawdowns, and substitution efforts — particularly in China, which dominates rare earths processing and pricing. As panic faded, prices retreated. Through 2023 and much of 2024, rare earths prices reflected this digestion phase: capital shifted from expansion to preservation, projects were deferred, and investor interest waned.

This is another defining feature of commodity cycles. Supply growth eventually wanes, demand continues to compound, and at some point the balance tips again. High prices sow the seeds of their own decline, while low prices quietly lay the foundations for the next upcycle.

Here’s the key point. Once a recovery begins, it rarely stops at the first hurdle. Prices tend to grind higher until new supply meaningfully responds — a process that, in complex and capital-intensive markets like rare earths, can take years.

That is why the current resurgence in NdPr prices matters: it’s emerging after a prolonged period in which supply growth lagged demand, as prices retreated from their 2022 highs and investment by existing producers shifted toward capital preservation. Over the past year, that imbalance has been reinforced by China sharpening its use of export controls across rare earths and downstream magnet technologies.

At the same time, Western governments have moved from acknowledgement to action. The US, Australia and others have stepped up support for domestic rare earths supply chains through equity investments, offtake agreements, and pricing mechanisms, while Japan and G7 partners have advanced bilateral frameworks, strategic reserve proposals, and downstream processing incentives.

Yet, despite these efforts, meaningful new ex-China supply has yet to materialise. Against that constrained backdrop, demand from electric vehicles, defence, automation and AI-powered robotics has continued to build — and geopolitical developments over the past 12 months have only sharpened the focus on supply security.

The upshot is clear: NdPr’s demand-supply dynamics have tightened materially, setting the stage for the price resurgence now underway.

Why have ASX rare earths stocks tanked?

That broader backdrop brings us to the immediate catalyst for this article. NdPr prices are surging — yet over the past two weeks, ASX-listed rare earths stocks have moved sharply in the opposite direction.

Why the disconnect?

There are two main factors at play. The first is a broader unwind across commodities equities following the sharp reversal in precious metals prices — led by silver — in late January. After a strong run through late December and early January, several “hot” commodities had attracted speculative interest, and rare earths stocks likely benefited from that rising tide. When sentiment turned, selling became indiscriminate, with investors de-risking across the sector regardless of underlying fundamentals.

The second — and more critical — factor was the timing of media reports citing comments from US government officials that suggested future support for critical minerals supply chains may place less emphasis on explicit price floor mechanisms. While no formal policy change was announced, the headlines were enough to heighten uncertainty and amplify the sell-off.

The result has been a sharp decline in the share prices of ASX-listed rare earths stocks — even as NdPr prices have continued to push higher.

Game over, or mispricing opportunity?

In a recent research note, Canadian-based investment bank Canaccord Genuity argues that the US government’s underlying commitment to developing ex-China rare earths supply chains remains firmly intact [1]. What is changing is how that support is delivered — with the US and other governments increasingly favouring selective investment, tariffs, and offtake arrangements over blanket price guarantees. 

Importantly, Canaccord frames this shift as a positive rather than a negative. Supporting the strongest projects — instead of backing the entire sector indiscriminately — improves market discipline, enhances long-term pricing durability, and increases the likelihood of attractive returns for well-positioned producers.

The recent sharp falls across rare earths equities may feel uncomfortable, but they are not unprecedented. Similar divergences between commodity prices and equities have marked past inflection points in the sector. When minerals prices break out ahead of equities, it often reflects short-term sentiment shocks colliding with longer-term structural trends.

Equity markets react quickly to headlines; commodity markets respond to physical scarcity, inventory levels, and forward demand. At present, the latter appears to be winning. Unarguably, NdPr prices are being underpinned by:

• Persistent supply tightness following a prolonged period of subdued supply growth

• Strong demand growth from electric vehicles, robotics, defence, and electronics

• Limited near-term capacity additions outside China

• Policy-driven demand for non-Chinese material, regardless of price

Against that backdrop, the recent equity pullback may say more about knee-jerk positioning than a deterioration in fundamentals.

Which ASX stocks stand to benefit?

If you think that this week’s divergence between NdPr prices and the share prices of ASX-listed rare earths stocks creates an opportunity, then you’ll want to keep a close eye on the following stocks.

When doing so, keep in mind that not all rare earths companies are created equal. The current environment is likely to favour those with scale, downstream exposure, and strategic relevance — particularly projects that align with Western supply-chain priorities.

Rare Earths Producers (market capitalisation order)

Lynas Rare Earths (LYC)

Lynas Rare Earths (LYC) chart

Lynas Rare Earths remains the only significant ex-China producer of separated rare earths at scale. With operations in Australia and Malaysia, and downstream expansion underway in the United States, LYC is the sector’s only established producer.

LYC remains the sector leader, with immediate exposure to rising NdPr prices and growing optionality in downstream processing and magnet manufacturing. Its position at the low end of the global cost curve gives it leverage to price upside without relying on policy support.

While near-term equity performance can be volatile, LYC provides direct operational leverage to NdPr prices and remains central to Western supply chain strategies.

Iluka Resources (ILU)

Iluka Resources (ILU) chart

Iluka Resources occupies a unique position in the sector. While best known as a mineral sands producer, it is developing the Eneabba rare earths refinery in Western Australia, backed by substantial federal funding.

Eneabba is weighted toward higher-value heavy rare earths such as dysprosium and terbium — precisely the elements most affected by recent export controls. While ILU’s mineral sands business faces cyclical headwinds, Eneabba provides a strategic counterweight.

ILU is aiming to be a critical downstream processor, with exposure to both light and heavy rare earths. Its role in building processing capacity outside China makes it strategically significant.

Rare Earths Developers (alphabetical order)

Arafura Rare Earths (ARU)

Arafura Rare Earths (ARU) chart

Arafura Rare Earths is developing the Nolans Project in the Northern Territory, one of the most advanced NdPr-focused rare earths projects outside China. The company has secured substantial government and institutional backing, progressed engineering and engineering, procurement and construction management ("EPCM") arrangements, and is moving toward a final investment decision ("FID").

Nolans is designed as an integrated mine-to-oxide operation, targeting NdPr for magnet markets in the US, Europe, and Asia. Arafura sits at the late-stage development end of the spectrum, with execution and financing now the key variables.

Once a FID is achieved, commissioning and ramp-up would likely take 1-2 years from that point.

American Rare Earths (ARR)

American Rare Earths (ARR) chart

American Rare Earths is an early-stage explorer, with projects spanning ionic clay and hard-rock rare earths systems. The company’s portfolio offers optionality rather than near-term production, with exploration success and metallurgical pathways still to be proven.

ARR’s portfolio remains at the exploration stage, and any significant production would likely be beyond 3 years, contingent on discovery success and pre-development milestones. This means ARR’s appeal lies in discovery potential rather than immediate exposure to NdPr pricing.

Brazilian Rare Earths (BRE)

Brazilian Rare Earths (BRE) chart

Brazilian Rare Earths is focused on high-grade, hard-rock rare earths discoveries in Brazil, including mineralisation with attractive NdPr proportions. BRE’s Brazilian projects are in exploration to early development stage and not yet at construction readiness. A meaningful production timeline is likely beyond 2–3 years, depending on financing, permitting, and plant build-out.

Brazil’s growing strategic relevance to Western supply chains adds geopolitical optionality.

Hastings Technology Metals (HAS)

Hastings Technology Metals (HAS) chart

Hastings holds a 40% interest in the Yangibana Rare Earths Project in Western Australia, now operated via a joint venture with Wyloo. Yangibana is a NdPr-rich project with established resources and a clear development pathway.

The project sits in the advanced development category, with recent strategic agreements aimed at linking production to downstream processing in allied jurisdictions. Realistically, Yangibana is 2-3 years away from first material production on a conservative read of timelines.

Lindian Resources (LIN)

Lindian Resources (LIN) chart

Lindian’s Kangankunde Project in Malawi is one of the world’s largest undeveloped rare earths deposits by grade and scale. The project has moved decisively into construction and execution, with processing plant contracts awarded and first production targeted for late 2026, with downstream separation to follow after that.

Kangankunde is heavily exposed to NdPr, positioning Lindian as one of the more direct beneficiaries of sustained price strength.

Meteoric Resources (MEI)

Meteoric Resources (MEI) chart

Meteoric is advancing the Caldeira Project in Brazil, an ionic clay rare earths system with favourable metallurgy and growing scale. Caldeira is progressing through late development phases, including pilot plant work. Commercial production would typically take 2–3 years, subject to funding and construction decisions.

Caldeira offers exposure to both light and heavy rare earths, with flexibility around downstream processing options.

Northern Minerals (NTU)

Northern Minerals Ltd (NTU) chart

Northern Minerals is distinct from the others on this list. Its Browns Range Project in Western Australia is focused on heavy rare earths, particularly dysprosium and terbium — not NdPr. NTU has operated pilot and demonstration facilities at Browns Range, but moving to full commercial production could take 2-3 years depending on financing, regulatory approvals, and heavy REE separation facilities.

It's important to note that heavy rare earths face even tighter supply constraints than NdPr and play a critical role in high-performance magnets. NTU’s exposure is therefore complementary rather than directly tied to NdPr pricing.

The signal investors should not ignore

The most important takeaway from the past week is not the equity volatility — it is the message being sent by prices. NdPr oxide has broken to three-year highs with strong momentum, well-defined trend structure, and rising demand zones. That’s the behaviour of a market that’s tightening.

When minerals prices move first, they often do so quietly. Equities tend to follow later — and sometimes violently. With rare earths once again at the intersection of geopolitics, supply security, and accelerating demand, the current divergence between price strength and equity weakness may prove to be the opportunity investors have been waiting for.

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References

[1] Canaccord Genuity — Rare Earths: Policy headlines spark volatility, fundamentals remain intact, research note, 29 January 2026.