Neodymium praseodymium prices are supported by environmental supervision

SHANGHAI, Apr 7 (SMM) – Neodymium praseodymium prices rose slightly amid the news of environmental inspections in Ganzhou over the previous week. Although it is difficult to continue the upward trend, prices still receive some strong support. 

It is reported that the enterprises subject to environmental inspections are mainly NdFeB scrap separation enterprises. Three companies have been affected, and the monthly production capacity of praseodymium and neodymium oxide is about 480 mt.

According to MIIT, there were 67 rare earth resource recovery projects for processing industrial scrap in China in 2014, which is distributed in 11 provinces (regions). The main purpose is to recycle and reuse industrial scrap, including neodymium iron boron, phosphor powder, and polishing powder. The capacity for NdFeB is more than 200,000 mt, which is about 6 times that of the total. There is a serious overcapacity. Some of these companies use the name of "resource recycling" to build smelting and separation production lines in disguise, purchase and process rare earth mineral products. The black trade and taxes evading disrupted the order of the rare earth market, affecting the healthy development of the rare earth industry.

Since H2 2014, MIIT and relevant departments include the recycling and utilisation of rare earth resources into planned management. Overburdened ore in infrastructure construction are unified into the total mining control plan (mineral product production plan); recycling rare earth products from industrial scrap has been included in the rare earth resource recycling plan.

As of 2018, the number of NdFeB scrap treatment enterprises in China have been reduced to 20, among which 3 companies have annual output of rare earth oxides exceeding 1,100 mt, including Ganzhou Bulai Terbium New Resources, Xinfeng Baogang Xinli Rare Earth and Ji’an Xintai Technology. The market share of the three leading companies is basically 8%, and the industry concentration is not high.

From the perspective of the raw material supply market, the purchase price of NdFeB scrap is relatively transparent, and the bargaining space is limited; Fe-B scrap is mainly priced according to the content of rare earth elements, mainly praseodymium, terbium, and dysprosium. The purchase price of NdFeB = (market price of rare earth oxides with tax excluded * (1+ value-added tax rate) * detection content of corresponding rare-earth elements in neodymium iron boron scrap * settlement yield-processing fee) (/ 1+ value-added tax rate).

On scrap sources, the end sources of NdFeB scrap are relatively scattered, and there is no monopoly by specific suppliers. NdFeB scrap mainly comes from the scrap produced in the production process by NdFeB magnetic material processing enterprises. In the process of producing NdFeB magnetic materials and the machining link generates the most waste. In order to relieve the pressure on production capacity, and this link does not involve core technology, the NdFeB magnetic material manufacturer generally outsources the machining link to the surrounding small processing plants, most of which are small individual households that distribute in regions.

NdFeB permanent magnet materials produce approximately 30% of scrap in the production process. In 2010-2019, the output of NdFeB permanent magnet materials in China increased by 118%, and the average annual compound growth rate reached 9.06%. The market supply of NdFeB scrap was positively correlated with the output of NdFeB permanent magnet materials.  It is expected that China's NdFeB scrap market will also gain benefits in the future.

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