The Q1 report released by China Northern Rare Earth in the evening of April 29 showed that the company achieved operating revenue of 9.287 billion yuan in Q1, up 61.19% YoY; net profit attributable to shareholders of the publicly listed firm was 431 million yuan, up 727.3% YoY; net profit attributable to shareholders of the publicly listed firm after deducting non-recurring gains and losses was 435 million yuan, up 11,622.98% YoY.
Regarding the reasons for the increase in operating revenue, China Northern Rare Earth stated that in Q1, the average prices of its main rare earth products, represented by Pr-Nd products, increased YoY, and sales increased YoY. Regarding the reasons for the increase in net profit, China Northern Rare Earth stated that in Q1, the average prices of its main rare earth products, represented by Pr-Nd products, increased YoY, raw material costs decreased YoY, and gross profit increased YoY.
China Northern Rare Earth also announced the company's key operating data for Q1 2025 (January-March) in its Q1 report:
As can be seen from the table above, the production and sales volumes of rare earth oxides, rare earth salts, rare earth metals, magnetic materials, and other products of China Northern Rare Earth all increased YoY in Q1. Among them, in Q1 this year, the production volume of rare earth oxides of China Northern Rare Earth was 5,730.86 mt, up 33.99% YoY; the sales volume of rare earth oxides in Q1 was 10,558.42 mt, up 57.61% YoY.
China Northern Rare Earth also announced other reminders in its Q1 report:
During the reporting period, the company seized favorable market opportunities, comprehensively improved the operational efficiency of production lines, continuously optimized the product structure, expanded the market in multiple ways, and deepened reforms, achieving record-high production and sales volumes. Meanwhile, influenced by policies such as the slowdown in the increase of upstream raw material supply and the stimulation of downstream consumption, the overall activity of the rare earth market was better than that of the same period last year. The company thoroughly implemented the new development philosophy, constructed a new development pattern, assumed the responsibility of being the main force in the construction of the "two rare earth bases," and achieved new results in high-quality development.
Production and operation:1. Scientifically organize production, flexibly adjust the allocation of raw materials, and achieve YoY growth in the production volumes of rare earth smelting and separation products, rare earth metals, and rare earth functional materials in Q1. 2. Adjust and optimize the structure of smelting and separation production lines, significantly improve the production capacity of single lanthanum and single cerium; implement a market-oriented integrated mechanism for the research, production, and sales of small-variety rare earth products, launch niche and specialty products such as oil-free cerium carbonate and low-chloride cerium carbonate into the market, and achieve the mass production and sales of 12 newly developed solid-state hydrogen storage materials.Marketing operations:1. Be market-demand-oriented, deepen the innovation of marketing models, strengthen marketing operations, and achieve YoY growth in the sales volumes of main products; streamline and optimize the number and sales share of long-term agreement customers, increase the sales scale of products outside long-term agreements, and further improve market participation. 2. Optimize and improve the new mechanism of differentiated pricing, and further enhance the company's price control and market influence over rare earth products. 3. Actively expand compliant trade channels, and achieve YoY growth in the trade revenue of rare earth products.Project construction:1. Promote the construction of the company's green smelting upgrading and transformation project with high quality. The second phase of the project is currently undergoing construction drawing design and equipment tender preparation. 2. Accelerate the commissioning and effectiveness of the company's and its subsidiaries' ongoing projects, improve the project operating rate, and cultivate new performance growth points.Scientific and technological innovation:1. Strengthen the management level of scientific research, continuously improve the output of scientific research achievements, apply for 63 patents in Q1, including 51 invention patents, release 3 enterprise standards, and form multiple new processes and new products such as a new process for the efficient recovery of fluorine and sulfur dioxide from roasting flue gas, and high-end rare earth polishing solutions for curved glass. 2. Promote the implementation of 3 national key research and development plan projects and 9 autonomous region science and technology "breakthrough" projects as planned, and actively apply for rare earth special tasks in the 2025 autonomous region science and technology "breakthrough" project. 3. Promote the commercialization of scientific and technological achievements. The pilot lines for new rare earth additives and rare earth flame retardant materials have commenced construction. The demonstration lines for rare earth thermal management textile materials, rare earth permanent magnet disc motors, and the biological recovery process of rare earths have been completed and entered the commissioning stage, fully promoting the industrialization process of scientific and technological achievements.
During the reporting period, the coordinated promotion and efficient implementation of various aspects of the company's production, operation, and management laid a solid foundation for the significant YoY growth in the company's Q1 performance.
The average prices of main rare earth products, represented by Pr-Nd products, increased YoY, and raw material costs decreased YoY, leading to a substantial increase in the net profit of China Northern Rare Earth in Q1.
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Entering 2025, compared with the end of 2024, the overall price of Pr-Nd oxide has increased. Reviewing the price trend of SMM Pr-Nd oxide in Q1, it can be seen that the average price of Pr-Nd oxide on March 31 this year was 444,500 yuan/mt, an increase of 46,500 yuan/mt compared with the average price of 398,000 yuan/mt on December 31, 2024, with a Q1 increase of 11.68%. Comparing the daily average price of Pr-Nd oxide in Q1 2025 (429,605.26 yuan/mt) with that in Q1 2024 (381,646.55 yuan/mt), it can be seen that the daily average price in Q1 this year increased by 12.57% YoY.
Recently, influenced by the lack of a significant increase in downstream demand and sluggish market transactions, the price trend of Pr-Nd has been weak. On April 29, influenced by restocking before the Labour Day holiday, the inquiry activity in the spot market slightly increased, and the quoted prices of Pr-Nd oxide warmed up compared with the previous trading day. However, most market participants still had a relatively heavy wait-and-see sentiment, the downstream's acceptance of high-priced raw materials remained limited, and the market purchasing sentiment was relatively cautious.
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