China Rare Earth: Rare Earth Product Sales Dropped Significantly YoY, with a Net Loss of Approximately 267 Million to 357 Million in 2024

On the evening of January 17, China Rare Earth disclosed its 2024 annual performance forecast, expecting a net loss attributable to shareholders of 267 million to 357 million yuan, compared to a net profit of 418 million yuan in the same period last year. The net loss excluding non-recurring items is expected to be 135 million to 190 million yuan, compared to a net profit of 247 million yuan in the same period last year. Basic earnings per share are expected to range from -0.2519 yuan/share to -0.3367 yuan/share.

China Rare Earth explained that the main reasons for the expected loss in this reporting period are as follows: Due to factors such as market environment and industry supply-demand cycles, rare earth product prices have significantly declined compared to the same period last year. Additionally, the company has made substantial inventory write-down provisions in accordance with accounting standards, which have increased significantly compared to the same period last year. Furthermore, the tax adjustment of the company's subsidiary, China Rare Earth (Hunan) Rare Earth Development Co., Ltd., also had a certain impact on the current period's profit and loss.

Moreover, on January 25, China Rare Earth announced that the 5,000 mt/a rare earth separation and processing project of its wholly-owned subsidiary, China Rare Earth (Yongzhou) Rare Earth New Materials Co., Ltd., under its controlling subsidiary China Rare Earth (Hunan) Rare Earth Development Co., Ltd., has been fully completed and accepted, and has transitioned to formal production and operation. China Rare Earth stated that after the project's full completion and transition to formal production, China Rare Earth Yongzhou will have the capacity to process and separate 5,000 mt of ion-adsorption rare earth concentrate annually, producing 15 types of single or mixed rare earth oxide (salt) products. The transition of the Yongzhou rare earth separation and processing project to formal production and operation will help the company strengthen its core business, expand its business scale, increase its market share, and enhance its industrial competitiveness and overall strength.

Reviewing the price performance of the rare earth industry chain in 2024, it can be observed that the overall price center has shifted downward. This can be seen from the price trends of Pr-Nd oxide, dysprosium oxide, and terbium oxide in 2024:

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From the average price trend of SMM Pr-Nd oxide, the average price on December 31, 2024, was 398,000 yuan/mt, compared to 442,500 yuan/mt on December 29, 2023, representing a decrease of 44,500 yuan/mt in 2024, a drop of 10.06%. The annual daily average price of Pr-Nd oxide in 2024 was 391,871.9 yuan/mt, compared to 529,274.79 yuan/mt in 2023, representing a decrease of 137,402.89 yuan/mt, with a YoY decline of 25.96%.

From the historical price trend of SMM dysprosium oxide, the average price on December 31, 2024, was 1,610 yuan/kg, compared to 2,490 yuan/kg on December 29, 2023, representing a decline of 35.34% in 2024. The annual daily average price of dysprosium oxide in 2024 was 1,828.08 yuan/kg, compared to 2,327.48 yuan/kg in 2023, representing a decrease of 499.4 yuan/kg, with a YoY decline of 21.46%.

From the historical price trend of SMM terbium oxide, the average price on December 31, 2024, was 5,600 yuan/kg, compared to 7,400 yuan/kg on December 29, 2023, representing a decline of 24.32% in 2024. The annual daily average price of terbium oxide in 2024 was 5,735.29 yuan/kg, compared to 9,110.17 yuan/kg in 2023, representing a decrease of 3,734.88 yuan/kg, with a YoY decline of 41%.

The decline in rare earth product prices has led to net profit losses for many companies in the rare earth industry.

However, entering 2025, the overall price center of the rare earth industry chain has shifted upward. According to SMM's market communication and survey analysis, as of now, the import situation of Myanmar ore remains sluggish and has not returned to normal as expected. This situation has directly led to a significant tightening of the domestic supply of ion-adsorption ore. Since January, there has been an evident undersupply of ion-adsorption ore in the market. Some raw ore separation enterprises, unable to secure a stable supply of ion-adsorption ore, have had to implement production cuts or even suspend production. This tight supply situation at the mining end has created a chain reaction in the market, driving up the overall prices of rare earth raw materials. As a result, the rare earth market in January has been exceptionally active, with raw material prices rising sharply and showing a strong upward trend overall.

Regarding the post-holiday price performance of rare earths, many market participants believe that due to the unresolved issue of tight supply at the mining end, the price of Pr-Nd products 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 strong upward trend seen before the holiday. If there is a significant increase in orders on the demand side, Pr-Nd prices may even rise significantly.