China Northern Rare Earth's H1 performance soars, "igniting" rare earth permanent magnet concept stocks. China Northern Rare Earth and Jingyuntong hit daily limit up [SMM News]

SMM July 10 News:

China Northern Rare Earth's H1 performance is expected to surge by 1,882.54% to 2,014.71% YoY, boosting rare earth permanent magnet stocks. Coupled with persistently high spot rare earth prices and optimistic market expectations for the rare earth sector, the rare earth permanent magnet index rose 2.04% by 11:10 on July 10. Among individual stocks, China Northern Rare Earth and Jingyuntong hit the limit-up, Jiuling Technology gained 9.8%, while Zhongke Magnetic Industry, China Rare Earth, Ningbo Yunsheng, and Shenghe Resources led the gains.

Market News

[China Northern Rare Earth's H1 Profit Expected to Jump 1,882.54%-2,014.71%]China Northern Rare Earth announced its H1 2025 earnings forecast on the evening of July 9. Preliminary estimates indicate net profit attributable to shareholders of 900 million to 960 million yuan, representing YoY growth of 1,882.54% to 2,014.71%. Adjusted net profit is projected at 880 million to 940 million yuan, soaring 5,538.33% to 5,922.76% YoY.

Ningbo Yunsheng stated on the investor interaction platform on July 9 that the company does not engage in direct rare earth export business. For NdFeB permanent magnet materials involving export-controlled categories, the company applies to relevant authorities in accordance with national regulations and exports only after obtaining permits.

Xiangming Intelligent responded to investor inquiries on July 4, noting its products focus on high efficiency and intelligence, with rare earth being a key raw material for high-efficiency motors and modular products. Some products already incorporate rare earth materials.

[Zhenghai Magnetic Material: Obtained Rare Earth Export License, Steadily Advancing Export Declarations]On July 1, Zhenghai Magnetic Material disclosed via the interaction platform that after the implementation of export controls on medium-heavy rare earth items, the company promptly complied with national regulations to advance export declarations. It was among the first batch to secure export licenses. Current operations proceed normally, with new licenses being approved progressively. The company maintains close communication with authorities to ensure compliant export operations and operational stability.

According to China Rare Earth Group's official WeChat account, the group held its fifth Party Committee theoretical study session (expanded) for 2025 on June 30. The meeting emphasized integrating green development throughout production, strategic planning, and reforms, focusing on sustainable mining, ecological restoration, energy conservation, and technological innovation to establish a resource recycling system and foster a green rare earth industry. Adhering to the national strategy, we advance carbon emission accounting across the entire rare earth industry chain and research on the dual carbon pathway, accelerating the R&D and application of rare earth functional materials.

[Xiamen Tungsten: Export Licenses for Rare Earth Products Already Obtained and Exports Conducted]On June 30, Xiamen Tungsten stated on an interactive platform that for products under rare earth export control categories, the company has gradually obtained export licenses from relevant national authorities and commenced exports after receiving the licenses.

[Ministry of Commerce Briefs on Rare Earth Export Approvals to the EU: A Certain Number of Compliant Applications Approved]On the afternoon of June 26, the Ministry of Commerce held a regular press conference, during which a reporter asked about the approval status of rare earth exports to the EU. He Yadong, spokesperson for the Ministry of Commerce, stated: China has always attached great importance to maintaining the stability and security of global industrial and supply chains. In accordance with laws and regulations, China has continuously accelerated the review of export license applications for rare earth-related products, legally approved a certain number of compliant applications, and will continue to strengthen the approval process for compliant applications. China is willing to further enhance export control dialogues and communications with relevant countries in this regard and actively promote convenient and compliant trade.

[JL MAG Rare-Earth: Successively Obtained Export Licenses for Medium-Heavy Rare Earth Related Items with Shipments to the US, Europe, and Southeast Asia]JL MAG Rare-Earth disclosed in its investor relations activity record that following the introduction of export control measures for medium-heavy rare earth related items, the company has conducted export declarations in compliance with national regulations and has successively obtained export licenses issued by national authorities, with export destinations covering the United States, Europe, and Southeast Asia. The company is actively collaborating with world-renowned tech companies on the R&D and capacity building of embodied robot motor rotors, with small-batch deliveries made.Z17/>[Shenghe Resources: Some Products Granted Rare Earth Dual-Use Items Export Licenses]

In response to an investor inquiry about whether Shenghe Resources had obtained export licenses for rare earth dual-use items issued by the Ministry of Commerce, Shenghe Resources stated on an interactive platform that the company strictly follows national laws and regulations in export license applications for relevant products, with some products already granted export licenses.

[Earth-Panda: Export Business Accounted for 31.98% of Q1 2025 Revenue]During a survey conducted on June 26, 2025, Earth-Panda indicated that the company had obtained export licenses for dual-use items and technologies issued by the Ministry of Commerce, with export regions covering the United States, Europe, ASEAN countries, and other regions and territories. In Q1 2025, the company's export business revenue reached 110 million yuan, accounting for 31.98% of total operating revenue. Specifically, export revenue to the United States amounted to 6.177 million yuan, representing 10.61% of total operating revenue. The company maintains stable cooperation with China Northern Rare Earth and other rare earth suppliers to ensure a multi-channel and stable supply of rare earth raw materials, with raw material inventory maintained at around two months.

Spot Market

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Metal plants are experiencing severe losses in raw material costs, with limited market acceptance for high-priced oxides. As the peak period for magnetic material enterprises to restock collectively ended, the price of Pr-Nd oxide, which had been rising consecutively, dropped back slightly on July 10, with an average price of 453,500 yuan/mt on that day, a decrease of 500 yuan/mt from the previous trading day, representing a 0.11% drop. Previously, due to the continuous procurement by major rare earth producers and influenced by news, some rare earth enterprises anticipated production cuts, leading to increased market concerns about reduced oxide production. Additionally, the growing expectations of downstream magnetic material enterprises for demand recovery by month-end further drove up the price of Pr-Nd oxide from July 3 to July 8.

Reviewing the rare earth price trends in the first half of this year, it can be seen that the average price of Pr-Nd oxide on June 30 was 444,500 yuan/mt, compared to an average price of 398,000 yuan/mt on December 31, 2024, representing an 11.68% increase in the first half of this year. The rare earth market at the end of last year was driven by multiple positive news, akin to receiving a boost, leading to a rapid rise in rare earth prices. Especially before the Chinese New Year, the price of Pr-Nd oxide once surged to 415,000 yuan/mt, representing an approximately 4.3% increase compared to the New Year's Day period. The festive atmosphere of the Chinese New Year seemed to have infected the rare earth market, with post-holiday bullish sentiment remaining high. Downstream procurement demand was also very active, further fueling the surge in rare earth prices. However, starting from late February, with the resumption of work by magnetic material enterprises, the number of new orders did not meet expectations, causing a slight pullback in rare earth prices, as if injecting a touch of calm into the overheated market. The rare earth market in March was somewhat mediocre. Without the intervention of new influencing factors, rare earth prices only fluctuated within a relatively small range, exhibiting a fluctuating rangebound trend. By April, rare earth prices dropped rapidly, and the market seemed to enter a brief cooling-off period. However, by late April, with procurement and restocking by major customers and the delivery of long-term agreement orders, rare earth prices were boosted again, showing an upward trend. In May, with the combination of various factors, rare earth prices generally continued their upward trend, and the market also showed a certain level of activity. However, entering June, rare earth prices began to stabilize, with no significant fluctuations. The reason behind this is that the market has entered a situation of weak supply and demand, with a stalemate formed in the game between upstream and downstream, making it difficult for prices to undergo significant changes.

Institutional Perspectives

GF Securities believes that amid the uncertainty of tariff policies, China's rare earth mining quotas are expected to be managed more strictly, and the strategic value of rare earth permanent magnets will continue to grow.

Guotai Haitong Securities reviewed the rare earth sector's performance from 2020 to 2021 and found that the stock price increases in the rare earth sector generally fell into three stages: (1) Confirmation of the bottom of commodity prices and repair of forward valuations. (2) Excess profits digest valuations, with leading enterprises in the industry growing alongside orders. (3) A surge in market sentiment, accelerated price increases, and a broad-based rally in the sector. Currently, the sector is in the second stage, awaiting a resonance in price increases in both domestic and overseas markets. Since the increase in rare earth commodity prices has been relatively small since February 2025, the overall sector has been rising slowly. However, with the subsequent transmission of overseas restocking demand and the arrival of the peak season for domestic NEVs, rare earth prices are expected to continue rising, driving the sector to transition to the third stage (i.e., a concurrent increase in commodity prices and stock prices). As the price center of rare earths rises, domestic rare earth magnetic material enterprises are expected to experience a double boost in performance and valuations, with leading enterprises in the resource and magnetic material sectors being preferred.

Guotou Securities' research report points out: The growth rate of supply quotas is slowing down, and the future demand for permanent magnets is promising. On April 4, 2025, export controls were implemented on medium-heavy rare earths, restricting the export of seven categories of items, including dysprosium and terbium, which triggered panic in overseas supply chains. European prices for dysprosium and terbium soared, with the price spread between domestic and overseas markets exceeding threefold. As magnetic material enterprises gradually obtained export licenses in May, exports gradually resumed, and the price of Pr-Nd oxide rose mildly. Currently, the industry chain is awaiting the implementation of quotas. Guotou Securities expects that the YoY growth rate of rare earth quotas will slow down in 2025. On the demand side, there has been a sustained increase in demand for NEVs, wind power, home appliances, etc. It is expected that humanoid robots will enter mass production in the short term, rapidly becoming an important application area for high-performance NdFeB. Currently, leading magnetic material enterprises have already begun to supply orders. With the continuous growth in demand, the supply and demand of Pr-Nd may improve. Guotou Securities expects that there will be a demand gap in the global Pr-Nd oxide market in the future, and Pr-Nd prices are expected to continue rising. With the gradual restoration of exports, the price spread between domestic and overseas medium-heavy rare earths is expected to narrow, and there is optimism about the price increases of domestic dysprosium oxide and terbium oxide.

Guoyuan Securities points out that due to the impact of global geopolitical conflicts, tariff policies, policies of some countries, and other factors, there has been a shortage in the supply side of some metals, exacerbating market sentiment. In the past two weeks, cobalt prices have performed well. Overseas, Congo announced a temporary ban on cobalt exports, with the supply side continuing to tighten. Domestically, China's rare earth control and export policies continue to be updated. Attention should be paid to the divergence in rare earth price trends. Recently, it is recommended to focus on investment opportunities in precious metals and rare earths.

Dongguan Securities pointed out that at the regular press conference held by the Ministry of Commerce on June 26, the spokesperson stated: China has always attached great importance to maintaining the stability and security of the global industrial and supply chains. It has continuously accelerated the review of export license applications related to rare earths in accordance with laws and regulations, and has approved a certain number of compliant applications. It will continue to strengthen the approval work for compliant applications. China is willing to further strengthen communication and dialogue with relevant countries on export controls and actively promote convenient and compliant trade. Currently, export demand is gradually recovering, and emerging fields such as humanoid robots are opening up growth space for rare earths. In the medium to short term, the industry's prosperity rebound continues to be promising.

Dongfang Securities stated that in the medium term, benefiting from the continuous optimization of the rare earth industry's supply structure, upstream smelting and processing enterprises, due to the scarcity of quotas, are expected to dominate the profit distribution in the industry chain, achieving high-quality development with controllable product quantities, mild price increases, and steady profit growth. There is a significant cognitive gap in the market regarding this, and it is recommended to pay attention to leading global rare earth industry chain groups.