Prices are rising like a rainbow. The week after the festival, the prices of rare earths continue to rise. taking praseodymium and neodymium oxide, the main variety of light rare earths, as an example, the price has broken through the million mark. According to my Nonferrous Network statistics, the price released at 17:00 on February 11th reached 1.08 million / ton, a weekly increase of 12%. This is also the second-highest price of praseodymium and neodymium oxide, not far from the all-time high of 1.275 million / ton in 2011.
Why did it go up? New energy vehicles, wind power, industrial motors, frequency conversion air conditioners and other emerging areas of strong demand, large magnetic enterprises orders increased significantly, generally full. The supply increment is limited, the contradiction between supply and demand is prominent, the price increase expectation of the industrial chain is strong, the downstream inventory is not high, the upstream cherish the sale of the situation, the price increase trend has been formed, and it is difficult to reverse. Industry inventory is at an all-time low.
Stable prices are conducive to the sustainable development of the industry, and there is no need to worry about policy crackdowns. In the past, there was a limited price auction of praseodymium and neodymium metals in the north, and the recent listing price of rare earths in the north in February was significantly lower than the market price, all of which can reflect the government's intention to stabilize rare earth prices and prevent sharp rises and falls. Looking back in history, rare earth prices often rise and fall sharply, and fall silent after a flash in the pan, which is not conducive to upstream enterprises, does not reflect the due value of resources, and is also not conducive to the stable production of downstream enterprises. At present, the pattern of the rare earth industry is unprecedentedly healthy, and maintaining the stability of rare earth prices is the primary goal of the government, but it cannot be understood unilaterally as suppressing prices! The positioning of rare earths is a national strategic resource and an important weapon of the country, which should be sold at a rare price, not at the price of land. Resources enjoy high prices, and it is difficult to change the policy trend of profit distribution in the upper and lower reaches of the industrial chain. The original intention and orientation of the policy is that a qualitative change has taken place, and we think that the secondary market has not fully priced this point!
How to map to the secondary market? Take the northern rare earths as an example, the two markets in January and July 2021 are caused by the rise in rare earth prices and the resonance of the energy metal market. Since September 2021, the new energy sector has adjusted sharply, and the equity market has obviously passivated the simple price increase of upstream products, such as lithium, cobalt and rare earths. There are multiple factors such as capital and emotion, but we can see that the fundamentals of rare earths have not changed, but are getting better and better. At present, we examine the plate and find that the new logic and expectation gap are forming, which is expected to become the new catalyst for the next wave of market!
The new logic of rare earths: the pattern of supply and demand stands out from the crowd, friends of time. In the next three years, rare earths are likely to be the healthiest varieties in the upstream supply and demand pattern of new energy. After the price rise caused by the outbreak of demand from 2020 to 2021, the upper and middle reaches of the new energy vehicle industry chain have entered the production expansion cycle, only the supply of rare earths is difficult to improve effectively. From the perspective of resources, overseas supply (Mount pass, Australia, Lynas, Burma) has reached its peak, and it is difficult to see a clear path of production expansion. In China, the black rare earths have disappeared, and the production quotas are all in the two major groups (Northern rare earths and the newly formed China rare Earth Group). According to the indicators issued before the festival, the overall growth rate is relatively restrained, with a year-on-year growth rate of 20%. With the passage of time, the supply and demand pattern of rare earth health can be said to stand out from the crowd, unlike other varieties are deteriorating, time will be the friends of rare earth plate, this is the new logic of rare earth plate, the sustainable time of healthy supply and demand pattern is expected to far exceed market expectations!
Industry leader-the quantity and profit of rare earths in the north. The first batch of production targets issued before the festival in 2022 are mainly rare earths in the north, with an increase of 16080 tons in mining targets, accounting for 95.7 percent of the increase in light rare earths in the country. Profits continue to rise, rare earth concentrates mainly come from brother companies, far lower than the market price, although they have no ore, but enjoy the appreciation of resources, according to the price of 1 million / ton, the profit per ton of praseodymium neodymium oxide is about 480000 yuan (deducting taxes and fees), the annual profit is likely to exceed 10 billion.
Risk hints: the risk of demand falling faster than expected; the risk of sharp change in industrial policy; the risk of worsening the epidemic situation.
![Rare Earth Prices Hold Up Well, and Market Inquiry Activity Increases [SMM Rare Earth Weekly Review]](https://imgqn.smm.cn/usercenter/AJTtH20251217171744.jpg)
