The rare earth sector extended its recent pattern of volatile declines during the morning session on June 24, 2026. This movement was influenced by progress in US-Iran negotiations and a rapid drop in international crude oil prices, which led to strong market expectations for a downward shift in energy cost benchmarks, potentially suppressing short-term valuations for resources like rare earths. However, amidst market divergences, a willingness to position for the long term has become apparent. Wind data shows that during the previous trading day's (June 23) significant sector adjustment, the Rare Earth ETF Huatai-PineBridge (516780), a core tool for market allocation to the rare earth sector, attracted incremental capital against the trend. The product's full-day turnover remained above 2 billion yuan, highlighting capital's recognition of the medium to long-term allocation value of rare earths.
This round of sector adjustment is likely more attributable to short-term sentiment and profit-taking volatility, as the medium to long-term supply-demand fundamentals of the rare earth industry have not substantially weakened. On the supply side, rigid policy constraints continue to materialize. The "Implementation Regulations of the Mineral Resources Law of the People's Republic of China" came into effect on June 15, 2026, formally listing 36 critical minerals, including rare earths, tungsten, lithium, cobalt, gallium, and germanium, in the national strategic mineral resources catalog. The approval authority for mining rights has been elevated to the national competent department, systematically compressing supply elasticity. Furthermore, after the market close on June 22, the Ministry of Commerce announced the addition of 10 U.S. entities involved in military activities to an export control list, including a U.S. rare earth company. This move may further reinforce the strategic resource value of rare earths and is expected to be a significant catalyst for a potential price surge.
On the demand front, the trend towards "electrification of everything," including new energy vehicles, humanoid robots, and direct-drive permanent magnet wind turbines for offshore wind power, continues to drive demand for rare earth permanent magnet materials. Concurrently, supportive policies from seven government departments regarding computing power grid integration have further activated the prosperity of the AI hardware industry chain. AI servers, cooling motors for intelligent computing centers, and high-capacity MLCC components all rely on rare earth permanent magnet materials. The expansion of computing power is expected to become another crucial support for growth in rare earth demand.
Driven by hard supply constraints, low inventory levels, and the release of new AI-related demand, prices for both light and heavy rare earths may have a foundation for upward movement. Spot price trends have already begun to reflect the resilience of the fundamentals. As of June 23, the market price for praseodymium-neodymium oxide was approximately 717,900 yuan per ton, up 6.28% since the beginning of June. The market price for dysprosium oxide was about 1.43 million yuan per ton, rising 13.94% in June. The market price for terbium oxide stood at 6.475 million yuan per ton, an increase of 6.67% for the month.
It is reported that the Rare Earth ETF Huatai-PineBridge (516780) closely tracks the CSI Rare Earth Industry Index, which selects securities of listed companies involved in businesses related to rare earth mining, processing, trade, and application. The index reflects the overall performance of listed companies in the rare earth industry. Its top five constituent stocks are China Northern Rare Earth, Goldwind Science & Technology, Xiamen Tungsten, China Rare Earth, and GEM Co., Ltd., all of which are competitive leading enterprises in the sector. Utilizing the Rare Earth ETF Huatai-PineBridge (516780) can help investors position for the value re-rating opportunity driven by both policy support and supply-demand dynamics.
The 2025 annual fund report shows that as of December 31, 2025, the number of holders of the Rare Earth ETF Huatai-PineBridge (516780) reached 60,300 households, making it the only rare earth-themed ETF in the market at the time with over 50,000 holders.
The manager of the Rare Earth ETF Huatai-PineBridge (516780) and its feeder funds (Class A 014331, Class C 014332), Huatai-PineBridge Fund Management Co., Ltd., is one of China's first ETF managers. With over 19 years of deep cultivation in the field of index investment, it has created transparent, convenient, and low-cost index tools for investors, such as the CSI 300 ETF Huatai-PineBridge (510300) and the A500 ETF Huatai-PineBridge (563360). As of the end of March 2026, the company's ETFs had cumulatively generated profits exceeding 223.4 billion yuan for holders over the preceding two years, making it one of only three public fund companies in the entire A-share market to achieve cumulative profits over 200 billion yuan during that period.