The recent strong performance of the rare earth sector is mainly affected by the news that the rare earth price center is expected to continue to move upward in the second half of the year and the upcoming promulgation of rare earth related management regulations. It is understood that at the beginning of this year, the prices of praseodymium and neodymium oxide, terbium oxide and dysprosium oxide were 400000 yuan / ton, 7.25 million yuan / ton and 1.94 million yuan / ton respectively. By mid July, they had risen to about 527500 yuan / ton, 6.85 million yuan / ton and 2.465 million yuan / ton respectively.
Since the beginning of July, the prices of major rare earth products have risen rapidly. Praseodymium and neodymium oxide, terbium oxide and dysprosium oxide have increased by about 24%, 23% and 11% respectively. The off-season of rare earth downstream is not light this year. Driven by the strong demand of downstream such as new energy vehicles, the pre effect of replenishment is obvious. Affected by the advent of rainy season and the aggravation of epidemic situation, the supply of rare earth in Myanmar has been disturbed, Superimposed on the recent reduction and shutdown of some smelting separation plants under the national environmental protection supervision, supply and demand basically form strong support for rare earth prices.
Rare earth permanent magnet materials (Nd-Fe-B) account for about 80% of the output value downstream of the rare earth industry chain. They are mainly used in traditional vehicles, new energy vehicles, wind power, energy-saving frequency conversion air conditioning and other fields. The consumption of neodymium iron boron per new energy vehicle is about 3-5kg, which is 3-5 times that of traditional vehicles. Assuming that the output of new energy vehicles will reach 18 million in 2025, the corresponding demand for neodymium iron boron will reach 54000-90000 tons. From 2021 to 2025, the average annual growth rate of neodymium iron boron demand in the new energy vehicle industry will be about 40%. In 2025, new energy vehicles may become the largest application in the downstream of rare earth.
In addition, in early July, Vice Minister Wang Jiangping of the Ministry of industry and information technology pointed out that it would promote the promulgation of the rare earth management regulations as soon as possible, legislate at the national level to regulate the high-quality development of the rare earth industry, and raise the development of the rare earth industry to an unprecedented strategic height.
The demand for new energy vehicles began to burst, the downstream demand for carbon neutral wind power and energy-saving variable frequency air conditioning continued to pick up, and the downstream demand for rare earth is expected to continue to improve“ During the 14th Five Year Plan period, the domestic rare earth supply will still be limited by the total mining index, and the supply side high-pressure policies such as anti Mafia and environmental protection will continue. It is expected that the overseas supply increment will be relatively limited in the next five years, and the global rare earth supply and demand may be in a tight balance for a long time. The price of praseodymium and neodymium oxide in 2021 will be raised to 800000 yuan / ton, and the price highs of dysprosium oxide and terbium oxide will be maintained at 3 million yuan / ton and 15 million yuan / ton. The price of rare earth is expected to open a bull.
In recent years, the supply side structural reform of the domestic rare earth industry has been continuously promoted, and the applications such as downstream magnetic materials have developed rapidly. The fundamentals of supply and demand are expected to enter a virtuous cycle.
Rare earth is known as "industrial vitamin", which has excellent magnetic, optical and electrical properties. It is widely used in metallurgy, military, petrochemical, glass ceramics, agriculture, new materials and other fields. Among them, in the application of rare earth permanent magnet, new energy vehicle accounts for the highest proportion and is the key material of motor.
Institutions generally believe that benefiting from the strong demand in downstream areas such as new energy vehicles, air conditioning and 3C, rare earth prices are expected to continue to rise in the third and fourth quarters. In addition, the regulations on rare earth management (Draft for comments) may be officially launched in the second half of the year, and the rare earth sector is expected to enter a new era of "cycle + growth". It is expected to ensure the medium and long-term high-quality development of the rare earth industry, and the rare earth price may open a bull.
In early July, the Ministry of industry and information technology said that it would strive to ensure the safety and stability of the industrial chain supply chain, speed up the formulation of guidance on promoting the orderly transfer of manufacturing industry, and accelerate the development of new service-oriented manufacturing models and industrial design. Strive to optimize the development environment of industry enterprises and accelerate the promulgation of rare earth regulations as soon as possible.
It is understood that as the first legislation in the rare earth industry, the regulations continue to strictly control the supply of rare earth from the legal level and enhance the strategic resource value of rare earth. The main contents include: administrative license and project approval for rare earth mining and smelting separation; Implement the total amount index management of rare earth mining and smelting separation; Strengthen the whole industrial chain management of rare earth industry; Improve import and export management; Implement the strategic reserve of rare earth resources and rare earth products.
In addition, from the demand side, Tianfeng Securities believes that the supply rigidity is optimized. After the ramp up of production capacity and the de inventory of raw materials in 2017-2020, the rare earth quota at the supply side may be steadily increased, and the supply rigidity is optimized. In the short and medium term, with the implementation of the new energy efficiency standards, the frequency conversion air conditioning proportion / NdFeB penetration rate of domestic household appliances continues to increase, It is expected that the annual growth rate of magnetic materials for air conditioning will continue to exceed 60% from 2021 to 2022.
Permanent magnet materials are the field with the largest proportion in the downstream of rare earth industry and the fastest growth rate in the future. Among them, emerging industries such as new energy vehicles have brought huge demand potential. According to the agency's prediction, the consumption of NdFeB magnetic materials in 2025 will be more than four times that in 2020, and the supply-demand gap will reach 10% in 2022. It is expected that with the increase of permeability, the demand for high-performance Nd-Fe-B will exceed 60000 tons by 2025
The regulations may be introduced in the second half of the year, and the downstream demand for rare earths continues to strengthen. In addition, consumer electronics has stabilized, leading magnetic material factories continue to expand, and the demand for replenishment has brought about the linkage rise of light and heavy rare earth prices, which is expected to continue. Industry insiders said that with the continuous optimization of the industry supply and demand structure, the rare earth price center is expected to continue to move upward in the second half of the year, and the performance of industry leaders such as northern rare earth is expected to exceed expectations.