Recently, the rare earth ETF market has been extremely lively, with daily turnover exceeding 200 million yuan, attracting widespread attention in the market. Behind this phenomenon is the frantic influx of funds, which also makes people wonder: how long can this upsurge in rare earth ETFs last?



From the data, since July, many rare earth ETFs have performed impressively. For example, as of July 28, Rare Earth ETF (516780) has had a daily turnover of over 200 million yuan for seven consecutive trading days, with a continuous net inflow of 127 million yuan in the past five trading days, and its scale has hit a new high in nearly four years. Rare Earth ETF Harvest is also not to be outdone, with a total inflow of 524 million yuan in the past five days, and its latest scale has reached 3.799 billion yuan, a new high in nearly a year.

This wave of funds surging into rare earth ETFs is no accident. On the one hand, as an important strategic resource, rare earths are indispensable in many emerging industries such as new energy vehicles, industrial robots, and wind power. With the global pursuit of clean energy and the vigorous development of emerging industries, the demand for rare earths continues to rise. On the other hand, from the supply side, events such as the announcement by Myanmar's Kachin region to ban rare earth mining by the end of 2025 and the zero import of rare earth metals by the United States in June have triggered market expectations of a tightening of mine-side supply. Driven by the dual effects of supply and demand, the price of praseodymium-neodymium oxide has exceeded 500,000 yuan/ton, and the sentiment in the equity market has also risen, attracting a large amount of funds to flow into rare earth ETFs.



However, there are many variables as to whether this upsurge can continue. From the demand side, although emerging industries have broad development prospects, they also face uncertainties in technological innovation and market competition. Once new technologies or materials that can replace rare earths emerge, the demand for rare earths may be impacted. From the supply side, although there is currently an expectation of tight supply, if other rare earth resource producing areas increase mining efforts or major breakthroughs are made in rare earth recycling technology, increasing market supply, it may also affect rare earth prices and the performance of related ETFs.

In addition, policy factors are also a key factor affecting the sustainability of the popularity of rare earth ETFs. The rare earth industry is subject to strict policy control, and any changes in domestic and foreign policies may have a significant impact on the production, trade and prices of rare earths.

The phenomenon of funds surging into rare earth ETFs with daily turnover exceeding 200 million yuan is indeed remarkable. But how long this upsurge can last requires investors to pay close attention to changes in supply and demand relations, technological development trends and policy trends, remain calm in the upsurge, and make investment decisions cautiously. After all, in the capital market, there is no market that only rises and never falls. Rationality and keen insight are the magic weapons for success.