SMM December 26 News:
Tungsten prices saw a slight uptick, supported by suppliers' reluctance to sell. Previously, rare earth prices experienced a "stabilization" driven by pre-holiday restocking, which also boosted several rare earth permanent magnet stocks. Additionally, the "hot" AI application concept contributed to the rise of the minor metal sector on December 26. As of 13:09 on December 26, the minor metal sector rose by 2.3%. In terms of individual stocks: JL MAG Rare-Earth increased by 6.67%, CNMC Ningxia Orient Tantalum Industry rose by over 6%, while Boqian New Materials, Galaxy Magnets, Zhenghai Magnetic Material, Long Magnetic Technologies, and XTC New Energy Materials were among the top gainers.
Tungsten
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According to SMM quotations, on December 26, the price of black tungsten concentrate (≥65%) was 142,000-143,000 yuan/standard mt, with an average price of 142,500 yuan/standard mt, up by 250 yuan/standard mt from the previous trading day, an increase of 0.18%.
SMM understands that with expectations of continued tightening in tungsten raw material supply, suppliers' reluctance to sell has strengthened, leading to slight price increases for some tungsten products.
Rare Earth
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On December 26, spot prices across the rare earth industry chain remained "stable."
Previously, due to minor pre-holiday restocking by some large enterprises, the spot price of Pr-Nd oxide rebounded and "stabilized" over three trading days from December 23 to December 25. However, as raw material prices recovered, market purchasing enthusiasm declined, making high-priced transactions for Pr-Nd products more challenging. Meanwhile, due to fluctuating news about Myanmar ore customs clearance, low-priced supply tightened rapidly, further reducing market transaction activity. Considering that this year's pre-holiday restocking in the rare earth market was weaker than in previous years, and some traders have a need to liquidate before the New Year, SMM expects that under the influence of multiple factors, rare earth prices may remain stable with a weak trend in the short term.
Opinions from Various Parties
Minsheng Securities' research report pointed out: Pay attention to opportunities in strategic advantage metal allocation, aligning with material upgrade opportunities driven by AI and military demand iterations. Domestically, China holds absolute dominance in strategic advantage metal resources, with its strategic position significantly enhanced. The rapid iteration of AI and military demand drives material upgrades, aligning with the development strategy of new productive forces. Rare earth magnetic materials: Domestic mining quota growth has slowed, while frequent supply disruptions in Myanmar impact availability. Medium and long-term demand continues to grow, with rare earth prices stabilizing and rebounding from the bottom. On the supply side, domestic indicators show slower growth, and Myanmar's conflicts hinder supply release. Medium and long-term benefits are expected from the rapid development of NEVs and energy-efficient motors, as well as marginal improvements in wind power demand, leading to steady overall demand growth. The supply and demand of Pr-Nd oxide are expected to return to a tight balance. Tungsten: Persistent shortages at the mining end make long-term tungsten price prospects favorable. Tungsten ore resources are severely depleted, with high-grade black tungsten ore resources gradually diminishing. China accounts for over 80% of global tungsten ore production (2023) and implements strict total mining control, making it difficult to increase tungsten ore supply in the future. Demand for hard alloys is expected to recover steadily, PV tungsten wire is likely to see continuous growth, and geopolitical conflicts may boost tungsten demand in the military sector. Overall tungsten demand is expected to grow steadily, with tungsten prices likely to remain favorable in the long term. Minsheng Securities recommends domestic strategic resource advantage sectors and new material sectors benefiting from AI and military technology iterations. Relevant stocks: JL MAG Rare-Earth, XTC New Energy Materials, Xiamen Tungsten, China Tin Group, Yunnan Tin, Boqian New Materials, BTR New Material Group, CNMC Ningxia Orient Tantalum Industry, Baoti Group, and Western Superconducting Technologies.
Guojin Securities believes: Myanmar's mines, as a critical source of heavy rare earths like dysprosium and yttrium and a supplementary source of light rare earths, face frequent supply disruptions and additional resource fees, which may elevate the industry's cost curve and thus raise the price center of rare earths. Continued attention should be paid to the situation in Myanmar. Guojin Securities estimates that if the growth rate of rare earth quotas remains within 15% by 2025, the global supply of rare earths is expected to continue improving. This year, rare earth prices have undergone a bottoming process. Against the backdrop of significantly strengthened expectations for supply and demand improvement and the catalytic effect of "supply-side reform-like" policies, commodity price centers have gradually risen. With the industry's cost curve moving upward and frequent supply disruptions, we remain optimistic about the rise in rare earth prices. As an industry where China leads globally in pricing and downstream applications, rare earths are expected to gain significant attention amid the backdrop of a US government transition. We reiterate the upward fundamentals of rare earth stocks and the value re-evaluation opportunities brought by the "supply-side reform-like" policies and the "strategic weapon" status. On the resource side, we recommend focusing on China Northern Rare Earth (leader in light rare earths) and JL MAG Rare-Earth (leader in high-end magnetic materials, with a layout in humanoid robots).
Bank of America Securities recently suggested that AI trading may have entered a new phase. With the popularization of AI applications, the market focus is expected to shift to the second phase of AI beneficiaries — software stocks and Agentic AI.
CITIC Securities stated that AI applications represent the most imaginative subfield within the AI sector. Compared to other AI sectors, the AI application segment remains relatively undervalued.
