Rare Earth Spot Market "Sluggish" at Year-End as Rare Earth Permanent Magnet Concept Strengthens; Long Magnetic Technologies and Huahong Technologies Lead Gains [SMM Newsflash]

SMM January 23 News:

As the Chinese New Year approaches, the year-end effect in the rare earth spot industry chain has become increasingly evident, with overall market activity remaining sluggish. However, driven by the "policy incentives" in the capital market and the active performance of robotics concept stocks, rare earth permanent magnet concept stocks have strengthened. As of 13:47 on January 23, rare earth permanent magnet concept stocks were up 1.26%, with Long Magnetic Technology up 11.23%, Huahong Technology up 8.52%, and New Life, Zhongke Magnetic, and Eontec among the top gainers.

Year-End Effect in Rare Earth Spot Market Becomes Evident, Market Activity Sluggish

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Spot price: On January 23, rare earth spot prices in the industry chain remained stable. From the performance of the rare earth spot market: trading in the rare earth ore and oxide markets was sluggish; most metal plants maintained normal production, but their market departments were already in a semi-holiday state, with low willingness to actively quote, leading to tighter spot circulation in the market; most magnetic material enterprises had suspended external quotations and planned to halt production for the holiday. Although some enterprises continued production to rush to deliver orders, overall market trading activity was low, and the atmosphere was relatively quiet.

Regarding post-holiday rare earth price performance, many market participants believe that due to unresolved supply tightness at the mining end, Pr-Nd product prices in February may not follow the usual downward trend. On the contrary, influenced by the continued tight supply-demand relationship, Pr-Nd prices may maintain a pre-holiday strong fluctuation trend, and if demand-side orders increase significantly, Pr-Nd prices could see a noticeable rise.

Voices from Various Sides

According to Tianfeng Securities' calculations, each Tesla humanoid robot requires 3.5 kg of NdFeB permanent magnets, which is 1.75 times the amount used in an NEV. By 2025, Tesla's demand for high-performance NdFeB permanent magnet materials for robots is expected to reach 6,150 mt, indicating that humanoid robots may replace NEVs as a new growth driver for rare earth permanent magnet demand in the future.

Guolian Securities believes that the demand side of the rare earth industry chain is expected to recover, driven by multiple catalysts in NEVs, wind power, home appliances, and industrial robots. On the supply side, the growth rate of China's rare earth mining quota control indicators has slowed, and rare earth ore imports are unlikely to increase significantly due to disruptions from regions such as the US and Myanmar. Meanwhile, as China's rare earth industry concentration increases, the pricing power of rare earth groups in the industry chain and their ability to control prices are expected to strengthen, providing stronger support for rare earth price floors. Guolian Securities estimates that based on calculations for high-performance NdFeB in major application fields such as NEVs, wind power, and industrial robots, global demand for high-performance NdFeB is expected to reach 174,000 mt in 2024, up 20,000 mt YoY; among them, demand for high-performance NdFeB in NEVs/wind power/industrial robots/variable frequency air conditioners/energy-saving elevators/consumer electronics and other fields is expected to be 73,000/35,000/14,000/17,000/10,000/8,000 mt, respectively. Additionally, the agency forecasts that global Pr-Nd oxide demand will be 98,000/107,000/116,000 mt in 2024-2026, while global Pr-Nd oxide supply is expected to be 103,000/107,000/111,000 mt, with supply-demand gaps of +540/+50/-450 mt, respectively, and the supply-demand pattern is expected to continue improving in 2025-2026.

Guotai Junan Securities believes that as China's rare earth quotas shift from a strong supply release cycle to a supply-constrained pattern, coupled with slow actual output growth despite overseas planned increases, the effectiveness of supply constraints is beginning to emerge. NEV and wind power demand continues to grow, and equipment renewal demand for industrial motors is expected to significantly lift the demand curve in 2025-2026, potentially becoming a new growth source for rare earth demand after NEVs. Additionally, with the expansion of application scenarios for robots, 2025 may usher in another growth year for rare earth magnetic materials.

CITIC Securities' research report pointed out that under the dual drivers of AI large models and policy support, the robotics industry is expected to experience rapid development. High-performance NdFeB permanent magnet materials, with their high reliability and stability, are ideal materials for robot servo motors and are expected to benefit significantly. In the NEV sector, driven by intelligent driving, demand for magnetic materials is expected to maintain rapid growth. With the continuous emergence of momentum in humanoid robots and low-altitude economy fields, emerging sectors are expected to become the core drivers of long-term growth in high-performance NdFeB demand, and the rare earth permanent magnet sector is continuously recommended for strategic allocation value.

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