The Zhitong Finance App learned that Societe Generale Securities released a research report saying that the implementation of the new national standard and the tightening of tax compliance will jointly push the rare earth recycling industry from extensive circulation to standardized management. Total production of praseodymium oxide increased 2.5% month-on-month in 2026Q2, while production of recycled praseodymium oxide decreased 8% month-on-month. Changes in the price difference between oxide and waste will depend on the relative changes in the price of oxide, the scarcity of compliant waste, and the rate of increase at the waste side. Short-term contraction in recycling supply supports the prices of praseodymium oxide and medium to heavy rare earths, while in the medium to long term, it is driving the concentration of waste resources in leading compliant companies.
Societe Generale Securities's main views are as follows:
The implementation of the new national standard and the tightening of tax compliance jointly push the rare earth recycling industry from extensive circulation to standardized management
On July 1, 2026, GB/T 46992-2025 “Technical Specification for Classification and Comprehensive Utilization of Recyclable Rare Earth Secondary Resources” was officially implemented. For the first time, the classification, coding, testing, packaging, transportation, storage, accompanying documents and comprehensive utilization requirements of rare earth secondary resources was systematically regulated from the perspective of all categories. Compared with GB/T 23588-2020, which mainly focuses on recycled materials for NdFeB production and processing, the new standard covers nine categories of rare earth magnets, fluorescent powder, hydrogen storage alloys, polishing powders, catalysts, crystals, ceramics, targets, and secondary resources containing rare earth metallurgy, and establishes a three-level “SRRE” coding system. Although the standard is a recommended national standard and is not a mandatory discontinuation of production or entry document, it is expected to become an important reference for downstream procurement, enterprise entry inspection, environmental protection accounts, tax compliance, and supply chain certification, promoting the gradual unification of waste trading language and delivery rules.
The share of regeneration declined in the second quarter. The core was due to the combination of recovery on the raw mining side and disruptions in tax compliance
Entering Q2, the operating rate of raw ore separation companies increased, and the output of praseodymium oxide at the raw ore end increased, diluting the share of recycled praseodymium oxide in total production. At the same time, as the supply of neodymium-praseodymium oxide increases and downstream enters the traditional low demand season, the fundamentals of supply and demand have been restored. Prices have fallen from the average price in the first quarter. Some recycling companies chose to cut production and maintenance, and the operating rate of the industry declined slightly. More importantly, tax inspections have continued to be strengthened since May. Tax compliance reviews were further deepened in June, and some recycling companies faced “no tickets to collect”, leading to a marked decline in recycled oxide output in June. Total production of praseodymium oxide increased 2.5% month-on-month in 2026Q2, while production of recycled praseodymium oxide decreased 8% month-on-month.
Tax compliance and implementation of new standards will drive the waste price system to shift from simple grade pricing to comprehensive pricing of “grade+bills+testing+liquidity”
Tighter compliance promotes waste stratification: waste that has tickets, clear classification, stable composition, can be tested, and can provide accompanying documents will gain greater mobility and bargaining power; waste without tickets, mixtures, unclear origin, or difficult to enter the factory for inspection may expand at discounted prices or even become marketless. Therefore, changes in the price difference between oxide and waste will depend on the relative changes in the price of oxide, the scarcity of compliant waste, and the rate of increase at the waste side.
Regenerative output may be difficult to recover quickly in the second half of the year, and increasing industry concentration is a more definitive medium- to long-term direction
After the official implementation of GB/T 46992-2025, the rare earth recycling market is still in the stages of waste invoicing, classification, inspection and delivery, warehousing and transportation, and tax compliance and rectification, and the short-term industry operating rate is expected to remain low. Although the next peak demand season may drive magnetic material companies to start construction and increase tax-inclusive waste output, it will still take time for supplier restructuring, bill compliance arrangements, contract processing model adjustments, and enterprise account construction. The production volume of recycled praseodymium oxide in the second half of the year is not as high as that of the first half of the year. Short-term recycling supply contraction supports the price of praseodymium oxide and medium to heavy rare earths. In the medium to long term, waste resources are concentrated in leading compliant companies. Leading companies with compliant procurement, inspection and analysis, environmental treatment, wet separation, and customer certification capabilities will benefit even more.
Risk warning: Implementation of recommended standards fell short of expectations; rapid recovery of recycled supply after tax and procurement model adjustments; loss of high-price inventory due to falling rare earth prices; demand for downstream magnetic materials fell short of expectations; environmental protection, safety or tax inspections led to phased discontinuation of production.