SHANGHAI, Feb 28 (SMM) - The supply of oxides from upstream raw ore and NdFeB scrap will tighten further with the intensive resumption of production post the CNY holiday. Output of PrNd oxide and alloy in February is expected to fall slightly MoM. The output of PrNd oxide in February is likely to fall mainly in Jiangxi, while increment is expected to be found in Jiangsu and Guangdong.
The short supply of NdFeB scrap is among the major causes for a reduction in output as the NdFeB magnetic materials companies have already cleared their stocks before the CNY, and the rising scrap prices along with the prosperous broad market has keep the scrap traders wait and see post the CNY holiday. As such, the operating rates of some scrap recyclers dropped in February amid tight NdFeB scrap supplies in the market.
In addition, some scrap recyclers suspended the production for routine maintenance. It is expected the output of oxide from scrap recyclers will drop slightly MoM in February. The supply tightness is expected to ease temporarily with new scraps from NdFeB magnetic materials companies in mid-March.
On the other hand, PrNd oxide and alloy output is likely to be stable in major light rare earth supplying places including Sichuan and Inner Mongolia Though the first batch of mining quotas have been officially released, the middle and heavy rare earth mines in Jiangxi have not started the mining activities yet. Hence the operating rates of some separation companies in Jiangxi dropped in February on tight raw ore supply.
Meanwhile, a few manufacturers in Jiangsu and Guangdong quickly resumed the production after short suspension due to lack of raw ore, and the local output picked up steadily. Tight raw ore supply is expected to sustain through the entire March, resulting expanding supply gap of mainstream rare earth oxide.
The current market contradiction lies in the intensifying supply shortage that constantly shores up mainstream rare earth products prices, and the still weak bargaining power of downstream players. The quotations of some NdFeB magnets were still subject to PrNd alloy which have been as high as 1.35-1.36 million yuan/mt, heightening the risk of loss for magnetic materials companies.
Although the cost of rare earths accounts for a large proportion in motor production, especially new energy vehicle motors and direct-drive wind turbines where the proportion is as high as more than 40%, the proportion in end products is still relatively small.
In terms of high-end magnetic materials, the increase in the prices of rare earths have not yet caused a major change in demand. In order to control costs, some magnetic material companies may use more low-priced raw materials to replace high-priced ones.
The growth of demand from downstream new energy vehicles and wind power generation will accelerate throughout 2022. With the expansion of large-scale NdFeB enterprises, the output of scrap will increase, and the annual output of some scrap enterprises is expected to expand as well. It is estimated that the supply of PrNd oxide from NdFeB scrap recycling industry will increase by about 5,000 mt from 23,000 mt to 26,000 mt in 2022.
Affected by the COVID-19 pandemic situation in Myanmar, it is probably that the China-Myanmar boarder port will remain closed in March, hindering the imports of auxiliary materials in the short term. In addition, the output of raw ore in Myanmar is also likely to be low during the rainy season in June-September. The supply of PrNd oxide based on ore imports from Myanmar may drop to less than 5,000 mt in 2022. The supply gap of rare earth is expected to deteriorate compared with 2021 with the continuously rising demand from the rare earth downstream sector. Hence the prices of mainstream rare earths will also hover at a high level.
![Цены на редкоземельные металлы остаются в целом стабильными, рыночная торговля продолжает оставаться слабой [SMM Ежедневный обзор рынка редкоземельных металлов]](https://imgqn.smm.cn/usercenter/UoswK20251217171743.jpeg)
