Washington Moves to Ditch China-Linked Rare Earth Benchmarks

Tsvetana Paraskova

Tue, February 24, 2026 at 8:00 AM GMT+9 4 min read

As the West is looking at ways to shake off China’s dominance in rare earths supply, it is also moving toward breaking the Chinese stronghold on the pricing of these minerals critical for the defense and auto industries and national security.

The United States is developing and pitching to allies a price floor mechanism to protect the rare earths markets and mineral supply from Chinese manipulation and government policies aimed solely at strengthening China’s dominant grip on the global market.

The move from the U.S. to have a Western benchmark for prices comes as the price of domestic Chinese praseodymium?neodymium (PrNd) oxide has soared to as much as $125 per kilogram, the highest level since July 2022.

That’s above the $110 per kg price threshold, below which the U.S. federal government has pledged to subsidize output from MP Materials under the deal signed with the rare earths company last year.

The 40% rally in the Chinese PrNd prices is pushing prices for these materials outside China, too, because producers and deals – even the MP Materials-DoD deal – are using the Chinese market prices.

“As such, Western consumers remain price?takers in rare earths markets where liquidity, transparency and alternative supply remain limited,” Benchmark Mineral Intelligence said in an analysis last week.

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“This exposes manufacturers, particularly in electric vehicles, wind turbines, defence systems and high?efficiency motors, to sudden input cost volatility originating from policy shifts within China.”

Currently, the MP Materials-U.S. government deal uses the NdPr price as published by the Asian Metal Market in China.

However, the agreement stipulates that if an “internationally recognized alternative price index is developed that expresses the mid -market price per ton of NdPr oxide (Pr 6O11 25%, Nd2O3 75%) outside China, then the U.S. may elect to substitute such Ex-China Index for the Asian Metal Market price.”

Moving away from Chinese pricing would be a crucial step toward reducing the West’s dependence on China’s government policies of pricing and supply that take into account Beijing’s national security interests.

China’s “legal framework governing mineral price reporting gives Beijing the ability to raise and lower prices to favor its economic and national security interests,” the U.S. Congress’ Select Committee on China said in November in a bipartisan investigation examining how Beijing manipulates the critical minerals markets to further its global authoritarian ambitions.

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“This legal framework effectively makes it illegal to publish prices that deviate from the PRC government’s wishes,” the investigation has found.

According to the report, “The PRC government, under the Chinese Communist Party (CCP), has engaged in a coordinated, decades-long scheme to control different critical minerals and bend the global market to their will. The PRC’s domination of critical minerals stems from its view of minerals in geostrategic terms, not as typical market commodities.”

The U.S. has been working on a West-led price floor for rare earths, while exchanges and price-reporting agencies outside China have been considering launching futures contracts and rare earths price assessments, respectively.

The U.S. has developed a price floor system for critical minerals, Under Secretary of State for Economic Affairs, Jacob Helberg, said last week.

“We have had multiple agencies take a close look at this. They’ve developed a very, very sophisticated price floor system that we are having conversations with our allies and partners about,” Helberg told Bloomberg.

Benchmark Mineral Intelligence last summer launched four ex-China rare earth price assessment grades, “in response to the growing maturity and liquidity being observed in the ex-China rare earths market.”

“Price opacity and dependency on China-dominated supply chains have created uncertainty for manufacturers, innovators, and governments,” Daisy Jennings-Gray, head of prices at Benchmark, said in July 2025.

Earlier this month, sources familiar with the plans told Reuters that CME Group is close to launching the world’s first futures contract in rare earths, while the other major derivatives exchange in the West, the Intercontinental Exchange, is also considering such a move, although it may not be in as advanced a stage as CME’s plan.

At any rate, the need for the rare earths market to shake off China’s opaque pricing and supply controls has pushed the West to work on its own rare earths pricing discovery.

By Tsvetana Paraskova for Oilprice.com

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