The price of rare earths is expected to remain high for the whole year under the tight balance between supply and demand.

At the beginning of the year of the Tiger, rare earth prices continued to rise, of which praseodymium neodymium oxide per ton price broke through the million yuan mark. According to the China rare Earth Industry Association, in January, the average price of praseodymium and neodymium oxide was 915300 yuan / ton, up 7.70% from a month earlier; the average price of dysprosium oxide was 2.9829 million yuan / ton, up 2.36% from a month earlier; and the average price of terbium oxide was 12.841 million yuan / ton, up 14.97% from a month earlier. The price of rare earths continued to rise in the first week of the year. On February 11, the average spot price of SMM praseodymium-neodymium oxide was 1035000 yuan / ton, with an increase of 14.68% in the past month. SMM praseodymium-neodymium metal spot quotation was 1270000 yuan / ton, and the increase in the past month was as high as 14.93%.

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The first batch of rare earth mining indicators released in 22 years, the increment of light rare earths is mainly in the north.

On January 28th, the Ministry of Industry and Information Technology and the Ministry of Natural Resources issued the notice on the total amount control index of the first batch of rare earth mining and smelting separation in 2022. The total amount control index of the first batch of rare earth mining and smelting separation in 2022 is 100800 tons and 97200 tons respectively. Among them, the light rare earth mining, medium and heavy rare earth mining and smelting separation indexes of China rare Earth Group are 29100 tons, 7806 tons and 34680 tons respectively, and the light rare earth mining and smelting separation indexes of northern rare earths are 60210 tons and 53780 tons respectively. Guangdong rare Earth Industry Group's medium and heavy rare earth mining and smelting separation index is 1620 tons and 6362 tons respectively; Xiamen tungsten industry's medium and heavy rare earth mining index and smelting separation index are 2064 tons and 2378 tons respectively.

The first batch of rare earth mining and smelting separation indicators in 2022 increased by 20% compared with the first batch in 2021, of which the light rare earth mining index increased by 23% and the medium and heavy rare earth mining index remained unchanged. The increment of light rare earth mining this time is mainly in the north, which is up 36.4% compared with the same period last year. The newly established China rare Earth Group has a light rare earth mining target of 29100 tons, which is 2.5% higher than the first batch of light rare earth mining targets of Minmetals, rare rare earths in China and rare earths in southern China in 2021. The concentration of medium and heavy rare earths supply in the first batch of indicators this year has increased significantly. In 2022, the first batch of light rare earths and medium heavy rare earths mining targets of the newly established China rare Earth Group accounted for 33% and 68% respectively, and the light rare earth mining targets of northern rare earths accounted for 67%. The mining targets of Guangdong rare earth industry group and Xiamen tungsten industry accounted for 14% and 18% of the total respectively.

With the development of new energy industry, the demand for rare earths continues to be strong, and the price of light rare earths continues to rise.

Although the first batch of rare earth quotas released by the Ministry of Industry and Information Technology before the festival has increased in 2022, the rare earth industry has changed fundamentally at the level of supply and demand. The orderly and highly centralized domestic supply pattern and the tripod stabilization of global supply have reduced the supply elasticity. On the demand side, under the background of global low-carbon and electrification, new energy vehicles, industrial motors, wind power and robots have replaced consumer electronics and become the main driving force of rare earth permanent magnet demand. According to the Galaxy Securities report, the global supply of rare earth oxides in 2022 is about 460000 tons, of which the supply of praseodymium and neodymium oxide used as an important part of the new energy industry chain is about 115000 tons (YOY+17.6%), while the demand for praseodymium and neodymium oxide in 2022 is about 128000 tons (YOY+12.5%). The gap between global supply and demand is 13000 tons. Spurred by tight supply and demand in the industry, rare earth prices continued to rise from 2021Q4 to the beginning of this year, and prices for the whole year are expected to continue the upward trend at the beginning of the year.