SHANGHAI, Jul 30 (SMM) - In recent weeks, the domestic rare earth market as a whole prospered evidenced by overall rising prices of all products. In particular, the price of praseodymium oxide increased significantly among others. In the middle and late June, the market prices of praseodymium rallied, and terbium bottomed out. Later, since mid-July, market prices of light and heavy rare earth rose across the board, and the market is relatively in tight supply resulted from insufficient pre-stockpile or oversold. Hence the short supply of metal intensified in current stage.
What is supporting the price hike of rare earth amid tightened supply? On one hand, the quick development of domestic economy in 1H offered strong support. According to National Bureau of Statistics (NBS), China economy increased 12.7% year on year, ahead all major global economies. The strong resilience of China economy also greatly facilitated the stable development of rare earth industry. On the other hand, the value rare earth rationalized, and is playing an increasingly important role in the structure of the domestic economy. With favourable national policies, confidence in the rare earth market has gradually increased coupled with strong demand from downstream industries, rare earth prices rebounded.
Take NdFeB as an example. Since 2000, the global NdFeB industry has been developing rapidly, with breakthroughs in technology. More importantly, international production capacity has been gradually shifting to China, given the country's abundant rare earth materials and low manufacturing costs. At the same time, China has become the world's largest producer and exporter of NdFeB permanent magnet materials by leveraging its advantage of rare earth resources and industrial policies.
With the development of new energy vehicles (NEVs), the demand for magnetic materials for new energy vehicle motors has also become the main growth engine for the demand of high-end NdFeB magnetic materials, i.e. the demand for praseodymium oxide is rapidly increasing. Therefore, the market for high performance NdFeB in NEVs is vast. The industry expects that the demand for NdFeB will reach more than 56,000 mt in the next 5 years when the NEVs will enter the stage of accelerated penetration rate, and the domestic demand will reach about 24,000 mt.