Foresee 2021: "panoramic Map of China's rare Earth Industry in 2021"

China is the largest reserves and producer of rare earths in the world, and has made continuous reforms in the development and utilization of rare earth resources. At present, China adopts measures to control the total amount of rare earth mining, and the separation of rare earth mining and smelting is completed by six major groups. In the future, the application of rare earths will become increasingly prominent, and the tight supply and demand of rare earths will lead to more demand for rare earth recycling.

The main listed companies in the rare earth industry: at present, the listed companies in the domestic rare earth industry are mainly Northern rare Earth (600111), Guangsheng Nonferrous (600259), Minmetals rare Earth (000831), Xiamen Tungsten Industry (600549).

General situation of industry

Rare earths are vitamins in modern industry

Rare earths are a group of typical metal elements, known as "industrial vitamins". To put it simply, rare earth elements refer to 15 kinds of lanthanide oxides with atomic numbers from 57 to 71 in the periodic table, and 17 oxides of scandium (Sc) and yttrium (Y), which are similar to lanthanide elements.

According to the structure and physicochemical properties of the atomic electron layer of rare earth elements, as well as their symbiosis in minerals and the characteristics that different ion radii can produce different properties, seventeen kinds of rare earth elements are usually divided into light rare earths and medium and heavy rare earths.

Because of their unique electronic layer structure and heat resistance, rare earths have been widely used in petroleum, chemical industry, gold, textile, ceramics, glass, new permanent magnet materials and other fields. Among the global downstream applications of rare earths, magnetic materials account for up to 25%, followed by catalytic materials for traditional rare earth applications such as petroleum vulcanization and cracking, and metallurgical materials (including hydrogen storage alloys) and polishing materials account for 18% and 14%, respectively.

Generally speaking, rare earths have become extremely important strategic resources, known as the "omnipotent land".

-- Analysis of rare Earth Industry chain

From resource development to application, rare earths are mainly divided into mining, smelting, separation, processing and other steps. First of all, the raw rare earth ore is obtained from the rare earth mine, and then the single rare earth metal, mixed rare earth metal and rare earth oxide are obtained by smelting and separation. For rare earth metals and oxides, they can be further precisely processed into rare earth magnetic materials, rare earth luminescent materials, rare earth catalytic materials, rare earth alloy materials and rare earth hydrogen storage downstream materials. finally, it is widely used in wind power generation, new energy vehicles, energy-saving frequency conversion air conditioners, energy-saving elevators, robots and intelligent manufacturing.

In addition, due to the non-renewable rare earth resources, the state has actively promoted rare earth recycling in recent years, so rare earth recycling has also become an important part of the rare earth industry chain.

At present, the total amount of rare earth mining and smelting in China is controllable, which is completed by six major groups, so the upstream and middle reaches of China's rare earth industry are only these six groups. The representative enterprises of rare earth precision processing into rare earth functional materials in the lower reaches of rare earth industry chain are Zhongke Sanhuan, Lingyi Zhizhao, Galaxy magnet and so on. Representative rare earth recycling enterprises include Huahong Science and Technology and Southern rare Earth.

The Development of rare Earth Industry in China

The development of rare earth industry known as "industrial vitamin" in China can be traced back to 1949, when the relevant ministries and commissions organized the Bayan Obo survey team of Beijing Institute of Geology to carry out large-scale geological exploration and research on Bayan Obo. After that, the rare earth production line was formally built in China in the sixties of the 20th century. China's rare earths have officially moved from laboratory to industrialization.

Up to now, the development of China's rare earth industry can be divided into four stages, which is currently in the stage of adjustment and optimization.

Development status of rare Earth Industry in China

1. Supply situation

Reserves: first in the world, accounting for more than 1/3

China is the largest rare earth reserve country in the world, with global rare earth reserves of 120 million tons (calculated by rare earth oxide REO) in 2020, while China's rare earth reserves are 44 million tons, accounting for more than 1/3 of the world.

-- output: implement measures to control the total amount of mining, accounting for more than half of the world's output

With the natural advantages of China's rare earth resources and advanced key rare earth separation technology, China has become the most important seller in the global rare earth market and the only country in the world that can provide all 17 rare earth metals.

China has taken measures to control the total amount of rare earth mining. According to the latest data, the output of rare earth minerals in China will be 140000 tons in 2020, accounting for more than half of the total output of rare earth minerals in the world.

2. Demand situation

-- the average annual apparent consumption is more than 150000 tons.

As a "modern industrial vitamin", rare earth has a wide range of applications. With the continuous development of China's modern industry, China's demand for rare earths is expanding day by day. From 2018 to 2020, the apparent consumption of rare earths in China is more than 150000 tons. In 2020, the apparent consumption of rare earths in China is as high as 184500 tons.

Note: 1) apparent consumption = output-export + import;

2) rare earth production data come from USGS, import and export data from China rare Earth Industry Association.

-- the demand for rare earth magnetic materials is the greatest, and the epidemic will affect the downstream demand in 2020.

The downstream demand of rare earth is mainly rare earth functional materials such as rare earth magnetic materials, rare earth catalytic materials, rare earth hydrogen storage materials, rare earth polishing materials, rare earth luminescent materials, rare earth alloy materials and so on. At present, rare earth magnetic materials have the greatest demand for rare earth raw materials, and the output of rare earth magnetic materials exceeded 200000 tons in 2020.

In 2020, affected by the epidemic, most of the rare earth functional materials factories stopped production in the first quarter of 2020, and basically returned to the same level in the second quarter, and the development of rare earth functional materials remained stable in the second half of the year.

Overall, in 2020, the production of most domestic rare earth functional materials decreased compared with the previous year, of which the output of long afterglow phosphors decreased by more than 50% to 242.8 tons. Only the production of hydrogen storage materials and sintered NdFeB magnets (blanks) increased over the previous year, with output of 10092 tons and 178500 tons respectively, an increase of 16.7 per cent and 45 per cent respectively.

3. Price situation

-- the price of rare earth products fluctuated greatly as a result of the epidemic in 2020.

In 2020, affected by the epidemic, the market prices of major rare earth products fluctuated greatly, and the prices of light rare earth products and medium and heavy rare earth products continued to differentiate; among light rare earth products, praseodymium and neodymium products fluctuated upward, while lanthanum and cerium products continued to decline. Since the second quarter, with the effective control of the domestic epidemic situation, enterprises have gradually returned to work and production, the economy has continued to recover, and downstream demand has been gradually released.

The supply and demand of praseodymium and neodymium products are in a tight balance to support the price shock upward; lanthanum and cerium products are affected by the epidemic and the contradiction between supply and demand is prominent, and prices continue to be under pressure; and medium and heavy rare earth products are supported by multiple factors such as tight supply and stable demand, and the price is running at a high level as a whole.

On the whole, the average price of most rare earth oxides in 2020 is higher than that of the previous year, and only the average prices of lanthanum oxide, cerium oxide, praseodymium oxide, europium oxide, erbium oxide, ytterbium oxide and yttrium oxide are lower than those in 2019.

Competition pattern of rare Earth Industry in China

-- Regional competition: showing the characteristics of "light in the north and heavy in the south"

The main rare earth resources in China are distributed in Inner Mongolia, Jiangxi, Guangxi, Sichuan, Shandong and other regions, forming a distribution pattern of north, south, east and west, with the distribution characteristics of "light in the north and heavy in the south". Light rare earths are mainly distributed in the Bayan Obo mining area in Baotou, Inner Mongolia, and their rare earth reserves account for more than 83% of the country's total rare earth reserves, ranking first in the world.

Ionic medium and heavy rare earths are mainly distributed in southern areas such as Ganzhou of Jiangxi Province and Longyan of Fujian Province, especially in Nanling area, which are easy to mine and extract, and have become an important production base of medium and heavy rare earths in China.

Overall, the proportion of rare earths produced by the three major rare earth production bases in Baotou, Inner Mongolia, Liangshan, Sichuan and Ganzhou in Jiangxi Province is about 58%, 23% and 7%, respectively.

-- Enterprise competition: six major groups compete on the same stage, and the advantage of rare earths in the north is obvious.

The national regulations on rare earth mining and smelting separation are carried out by China North rare Earth (Group) High-tech Co., Ltd., China South rare Earth Group Co., Ltd., China rare Earth Industry Co., Ltd., Guangdong rare Earth Industry Group Co., Ltd., Minmetals rare Earth Group Co., Ltd. And Xiamen Tungsten Industry Co., Ltd. Six major rare earth groups.

In 2020, the total amount control index of rare earth mining in China is 140000 tons, and the total amount of rare earth mining and distribution of rare earth mines and smelting separation products of North China rare Earth (Group) High-tech Co., Ltd. is the most, accounting for 47.25% of the total amount of rare earth mines and smelting separation products. This was followed by China Southern rare Earth Group Co., Ltd. And China rare rare Earth Co., Ltd., with a combined total of 27112 tons and 23879 tons, accounting for 20.08% and 17.69%, respectively.

Development Prospect of rare Earth Industry in China

The role of application will become increasingly prominent, and the tight supply and demand of rare earths will lead to more demand for rare earth recycling.

Rare earth is an important non-renewable strategic resource, and it is an indispensable key element for the transformation of traditional industries, the development of emerging industries and national defense science and technology industry. With the continuous deepening of the world scientific and technological revolution and industrial reform, as well as the in-depth implementation of China's national strategies such as "Belt and Road Initiative", "made in China 2025" and "Internet +", it will continue to inject new momentum into the development of new energy, new materials and other strategic emerging industries and high-tech industries, and the application value of rare earths in national economic and social development will be further enhanced and its role will be more prominent.

On the other hand, because rare earths are non-renewable, the phenomenon of "black rare earths" in China in the past seriously affected the development of China's rare earth industry. In order to promote the development of the industry, the state has actively rectified the chaos in the industry in recent years and vigorously promoted the optimization of the supply structure of the rare earth industry. It is expected that for a long time in the future, the state will continue to implement the total amount control of domestic rare earth mining and smelting separation, and the development of domestic rare earth industry will be further standardized.

In addition, due to the tight supply and demand in the rare earth market, the state has actively promoted the conservation and comprehensive reuse of rare earth resources in recent years, and the recovery of rare earth waste has become a new demand. Rare earth waste recovery is the process of extracting rare earth elements to form rare earth oxides from the wastes produced in rare earth production and terminal commodities containing rare earths. Rare earth oxides can be obtained after further processing. In the future, under the background that the state controls the production of rare earths and the demand for rare earths downstream continues to expand, the market will give rise to more demand for rare earth recycling.