Thousands of yuan a day! Rare earth prices continue to soar, a number of companies plan to expand production capacity

The price of rare earths has continued to soar since mid-December, and as of today (21)), SMM praseodymium and neodymium oxide has reached 456500 yuan / ton, up 49000 / ton from 407500 yuan / ton at the end of last year (December 31), or more than 12%. It is also the highest since October 2017. According to SMM research, the current rare earth spot market inquiry activity has weakened, specifically, in light rare earths, praseodymium oxide, neodymium oxide, and praseodymium neodymium oxide prices have risen compared with the beginning of the week, medium and heavy rare earths, terbium continued to rise, dysprosium slightly stabilized.

SMM praseodymium neodymium oxide-average price (yuan / ton)

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Rare earth management regulations issue policies or increase the rigidity of supply

On January 15, China's Ministry of Industry and Information Technology issued relevant opinions on the regulations on the management of rare earths, proposing that "the state shall implement total target management for the separation of rare earth mining and smelting". According to a research report released by Zhongtai Securities, domestic rare earths account for 37% of the world's resources, while production currently accounts for 63% of the world's production, which is evident in China's global supply of rare earths. In order to protect the environment and the strategic resources of rare earths, the annual mandatory plan measures have been implemented for the mining and separation of rare earths in China. This draft for soliciting opinions clearly states that no unit or individual may invest in the construction of rare earth mining and rare earth smelting separation projects without approval. It also sets a general tone for the follow-up domestic rare earth mining and separation, that is, to continue to implement total quantity target control.

Tianfeng Securities pointed out that the policy or overweight supply is rigid, demand is picking up in many ways, and the profits of the rare earth industry chain are expected to return to a reasonable range. The core of the policy is still supply optimization. The management regulations include the traditional total quantity index management, environmental protection management, reserve management, management coordination, etc., among which the two aspects worthy of attention are strengthening the management of the whole industry chain and stipulating the relevant legal liability punishment program, including circulation (trade), comprehensive utilization and recovery, traceability system, import and export, state reserve and other five aspects are expected to increase the supply rigidity. On the whole, it is further beneficial to optimize the supply pattern of the faucet, the rigidity is stronger, and the long-term mechanism is expected to fully land.

Low-carbon economy will help demand-side industries continue to rise.

The so-called rare earth is the general name of seventeen metal elements including lanthanide, scandium and yttrium in the periodic table. Rare earth permanent magnet materials are the key basic materials in industry, among which NdFeB is the most widely used. According to Huabao Securities Research report, in the existing rare earth permanent magnet material system, NdFeB permanent magnet material is the magnetic material with the widest range of application, the fastest development speed and the best comprehensive performance. High-performance NdFeB is widely used in traditional automobiles, new energy vehicles, industrial applications, wind power generation, consumer electronics, frequency conversion air conditioners and energy-saving elevators. Praseodymium-neodymium oxide is the main raw material for the production of neodymium-iron

Warburg Securities believes that new energy vehicles, home appliances, consumer electronics driven downstream high-performance NdFeB magnetic materials demand high growth, while the supply side of low-speed growth, it is expected that 2021-2025 praseodymium neodymium oxide into the shortage cycle, praseodymium neodymium oxide prices may continue to rise, the industry boom will also continue to improve. NdFeB leading enterprises benefit from the rapid growth of downstream demand and the increase in profits brought about by the mild rise in rare earth prices. From the demand side, it is estimated that the global demand for NdFeB from 2023 to 2025 is 27.8,30.2 and 324000 tons respectively, and the demand for praseodymium and neodymium oxide is 8.5,9.2 and 99000 tons respectively, with year-on-year growth rates of 8 per cent, 8.5 per cent and 7.5 per cent, respectively. The world ushered in the new energy vehicle policy increase period, it is expected that 2021-2025 rare earth permanent magnet industry prosperity will continue to improve, domestic NdFeB magnet major enterprises will continue to benefit.

A number of enterprises plan to speed up production expansion and pay attention to the opportunities of permanent magnet industry chain

Recently, Zhenghai Magnetics announced that the company plans to invest 3 billion yuan to build a production base of high-performance NdFeB permanent magnetic materials with an annual production capacity of 18000 tons in Rugao, Jiangsu Province. after reaching production, it is expected to achieve annual sales of 3.8 billion yuan, more than triple the annual revenue in 2019. According to the Zhongtai Securities Research report, the planned production capacity of 18000 tons of high-performance NdFeB magnetic materials is scheduled to start before June 28, 2021, and will be put into production within 36 months from the date of construction. The company's high-performance NdFeB magnetic production capacity continues to expand, according to the official report of Zhenghai Group Co., Ltd., the company Fuhai plant 5000 tons of low-weight rare earth permanent magnetic material project has been officially put into production, the company's high-performance NdFeB magnetic production capacity increased from 6300 tons to 11300 tons, the planning of 18000 tons of high-performance NdFeB project put into production, the company's high-performance NdFeB production capacity will reach about 30000 tons.

Jinli permanent Magnet also said on the interactive platform recently that the company plans to invest in the construction of a "high-performance rare earth permanent magnet material base project" through its wholly-owned subsidiary Jinli Baotou Company, with a total planned investment of 575 million yuan. after the project reaches production, it will form an annual production capacity of 8000 tons of high-end magnetic materials. the construction period of the project is 2 years, and the project is being actively promoted. Jinli permanent Magnet said that after the completion of the project, it will help the company to expand its capacity and increase efficiency, improve the stability and consistency of product quality, improve material utilization, further reduce production costs, and improve product competitiveness.

With the downstream demand pulling domestic major NdFeB have expansion plans to increase production capacity, permanent magnet material demand may usher in explosive growth. Zheshang Securities believes that permanent magnet materials are the largest downstream of the rare earth industry and the fastest growing area in the future. among them, emerging industries such as new energy vehicles have brought huge demand potential, and the consumption of NdFeB magnetic materials in 2025 will be more than four times that of 2020. The field of traditional cars is growing steadily, and the field of new energy vehicles is growing at a high speed. Global sales of new energy vehicles are expected to exceed 12 million in 2025, and the consumption of NdFeB blanks will reach 60, 000 tons. it will reach 35% of the current annual NdFeB blank production, which is more than 4 times the NdFeB blank consumption of new energy vehicles in 2020. Wind power is currently the largest downstream area of NdFeB consumption, which is expected to pull 17000 tons of NdFeB blank in 2020, and is expected to maintain a compound growth rate of more than 10% in the future with the steady growth of new installed capacity of global wind turbines.