Rare earth metals concept stocks strengthened in early trading, as of the deadline of this report, $JLMAG (06680.HK)$ up by 21.75%, at 9.18 Hong Kong dollars; $CHINA RAREEARTH (00769.HK)$ up by 13.1%, at 0.475 Hong Kong dollars.

On the news front, it was reported that on October 23, the Kachin Independence Army in Myanmar announced that they had taken control of the country's rare earth mining area, leading to a halt in local rare earth mining operations. According to SMM, upstream mining companies have reflected that the situation has resulted in border closures, temporarily preventing Myanmar's rare earth mines from entering the country. It is known that Myanmar's rare earth mines mainly consist of medium and heavy rare earth ion ores, making it the world's third-largest rare earth ore producing area. In addition, according to the General Administration of Customs, from January to September of 2024, China imported 0.031 million tons of rare earth oxides from Myanmar, a decrease of 3% year-on-year, accounting for 74.9% of the total oxide imports during the same period.

Regarding whether this event will affect rare earth prices, individuals related to China Northern Rare Earth mentioned that with the reduced supply, the raw material side may become tightly balanced. HTSC believes that the shutdown of mines in Myanmar and the limited supply of domestic medium and heavy rare earths due to environmental protection measures may lead to a shortage in the supply and demand pattern of medium and heavy rare earths. If raw material inventories are depleted, prices of medium and heavy rare earths may increase significantly. The supply and demand pattern for light rare earths will also improve, but domestic supply still has potential, and the extent of scarcity may be less than that of medium and heavy rare earths.