Wind power installed capacity surges, how will the rare earth market change subsequently? [SMM Analysis]

SMM News on June 27: In May, new installations of wind power reached 26.32 GW, an eightfold increase YoY and a fourfold increase MoM, bringing a total NdFeB demand of 2,527 mt. According to the SMM survey, this change was mainly due to a shift in the pricing mechanism: on-grid tariffs for wind power projects commissioned after June 1 would participate in market bidding, while the pricing mechanism for projects commissioned before June remained unchanged. Therefore, wind power companies rushed to install projects in May to secure stable electricity price returns.

Given the "rush first, install later" nature of the wind power market, NdFeB demand will not be concentrated. Meanwhile, due to the declining penetration rate of direct-drive wind turbines in the wind power market, most wind power installations now use doubly-fed induction generators, leading to a decrease in NdFeB demand in the wind power sector compared to previous years. However, the wind power sector only accounts for a small portion of the NdFeB end-use market. Other sectors, such as NEVs, industrial robots, and energy-efficient home appliances, have seen rapid development this year, leading to a continuous increase in NdFeB demand. As of now, although the NdFeB market is still under the influence of export controls, with the accelerated approval of export licenses and the continuous revival of domestic end-use demand, most industry players are bullish on the market outlook. Although prices are slightly weak today, this is mainly due to suppliers' month-end cashing-in needs, leading to a short-term price decline. However, in the long run, the rare earth market still has room for growth.

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