Xing Yanjun said
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35% of global rare earth consumption comes from rare earth permanent magnet materials, accounting for about 91% of the consumption value. Rare earth permanent magnet materials benefit from the rapid development of new energy vehicles and electronics industry, accounting for the highest proportion of global rare earth consumption, at 35%
Source: CITIC Securities Author: Ao Chong
1 Rare earth permanent magnet: outstanding performance, broad prospects
Rare earth permanent magnet materials are the most valuable application areas for rare earths downstream
The distribution concentration of rare earth resources in the world is relatively high, and China accounts for nearly 40%. According to the data released by the United States Geological Survey (USGS), the total reserves of rare earth resources in the world are about 120 million tons, of which China's reserves are 44 million tons, accounting for about 36.7%, Vietnam's reserves are 22 million tons, accounting for about 18.3%, Brazil's reserves are 21 million tons, accounting for 17.5%, Russia's reserves are 12 million tons, accounting for 10.0%, and the total of the four countries exceeds 80% of the global total reserves, and the concentration of resource distribution is relatively high.
35% of global rare earth consumption comes from rare earth permanent magnet materials, accounting for about 91% of the consumption value. Rare earth permanent magnet materials benefit from the rapid development of new energy vehicles and electronics industry, accounting for the highest proportion of rare earth consumption in the world, accounting for 35%; catalytic materials are mainly used in the field of automobile exhaust purification, accounting for about 26%; the remaining major consumption areas are battery alloys, ceramics/pigments/glazes, glass polishing powders and additives, phosphors and others. Although rare earth permanent magnet materials only account for 35% of consumption, they occupy up to 91% of the consumption value, which is the area with the highest consumption value of rare earths.
The proportion of permanent magnet materials in China's rare earth consumption is much higher than in other fields, more than 40%. According to the data of Zhiyan Consulting, in 2019, permanent magnet materials accounted for more than 40% of China's rare earth consumption structure, smelting and machinery, petrochemical and glass ceramics accounted for 12%, 9% and 8% respectively, hydrogen storage materials and luminescent materials accounted for 7% each, and catalytic materials, polishing materials and agricultural light textiles accounted for 5% each. From the perspective of domestic rare earth permanent magnet production, sintered NdFeB magnet is the only rare soil functional material that achieves positive output growth, which confirms that the high prosperity of the high-performance magnetic material industry acts on the upstream product structure adjustment.
NdFeB permanent magnet has excellent performance and good energy saving effect
Rare earth permanent magnet materials have excellent performance relative to metal and ferrite permanent magnet materials, and Nd-Fe-B is by far the most magnetic permanent magnet material and the most widely used. Permanent magnets are magnets that can maintain magnetism for a long time after magnetization, and can be divided into three categories: metal permanent magnet materials, ferrite permanent magnet materials and rare earth permanent magnet materials. Although metal permanent magnet materials and ferrite permanent magnet materials have the advantages of cheap price and sufficient raw materials, their maximum magnetic energy product (B · H)max is usually less than 100 kJ/m3, relatively less magnetic, so it is gradually replaced by rare earth permanent magnet materials. Rare earth permanent magnet materials in the development, has experienced the first generation of SmCo5, the second generation of SM2Co17, the third generation of Nd2Fe14B these three stages of development, the current fourth generation of iron nitrogen (carbon) permanent magnet is still in the research and development stage, from the industrialization is still a certain distance.
Sintered NdFeB is the most widely used NdFeB magnetic material. According to the different manufacturing processes, NdFeB materials can be divided into three types: bonded NdFeB, sintered NdFeB and hot pressed NdFeB. Sintered NdFeB is currently the magnet with the highest comprehensive performance and the most widely used NdFeB material. Bonded NdFeB magnetic performance is not as good as sintered NdFeB, the scope of application is limited, accounting for less than 10% of the market share; hot pressure NdFeB production process is complex, high processing costs, raw material prices even exceed the price of finished products, mass production is difficult, the current output is small, the application field is limited to small and micro motors and other fields.
High-performance NdFeB has broad application prospects in the future
NdFeB is divided into low-end and high-end according to the difference in downstream product demand. Low-end NdFeB is mainly used in magnetic adsorption, magnetic separation, electric bicycles, luggage buckles, door buckles, toys and other fields, while high-performance NdFeB is mainly used in high-tech barriers in various types of motors, in the new energy vehicles, inverter home appliances, energy-saving elevators and wind power generation and other fields of wide application prospects. Low-end NdFeB technical threshold is low, industry production capacity is scattered, product homogenization is serious, market disorder and vicious competition, oversupply, high-end NdFeB performance is better, with higher technology, capital access threshold, the future development space is broad.
2 Demand inflection point: taking the "double carbon" east wind, downstream demand may continue to increase
Growth in demand for high-performance NdFeB will quickly drive demand for rare earths. According to the data of China Rare Earth Industry Association, in 2019, the largest proportion of global NdFeB downstream consumption is direct drive motors accounting for 14.1%, the automotive industry accounting for a total of 13.5%, of which new energy vehicles account for 6.9%, EPS steering systems account for 6.6%, followed by public railways accounted for 12.1%, electric bicycles, wind power generation, industrial motors, medical equipment and intelligent robots accounted for 10.9%, 9.2%, 8.6%, 7.8%, 7.7% of global NdFeB consumption, respectively. With the global development of new energy and the implementation of environmental protection policies in various countries, especially the domestic "carbon peak" and "carbon neutrality", the new energy vehicles, wind power energy-saving industries or will usher in rapid development, high-performance NdFeB demand is expected to release great potential.
New energy vehicles: long-term drive, high-speed growth
Rare earth permanent magnets account for about 60% of rare earth applications in the new energy automobile industry. Compared with traditional fuel vehicles, new energy vehicles use more than 140 small motors, and the amount of rare earth permanent magnets used in bicycles has increased significantly due to the increase in motor use. The vigorous development of the new energy automobile industry provides a good opportunity for the structural optimization of domestic rare earth permanent magnet products. It can be seen from the rare earth consumption of the new energy automobile industry that the new energy automobile industry mainly involves rare earth permanent magnets and rare earth hydrogen storage materials, accounting for 64% and 36% respectively. For hybrid vehicles, pure electric vehicles and fuel cell vehicles in their infancy, permanent magnet motors are one of the indispensable core devices.
Under the background of carbon neutrality, a number of policies at home and abroad are conducive to the development of new energy vehicles. Domestic: The "New Energy Automobile Industry Development Plan (2021-2035)" issued by the State Council proposes that the sales volume of new energy vehicles in mainland China will reach about 20% of the total sales of new automobiles in 2025. Foreign: The White House in the United States proposed on August 5, 2021 that new energy vehicle sales accounted for 40-50% by 2030, increasing support for the new energy automobile industry; the European Union proposed in July 2021 to ban the sale of fuel vehicles in the European Union in 2035, of which Ireland, Sweden, Denmark, and the Netherlands will ban the sale of fuel vehicles earlier than 2035.
It is estimated that overseas new energy vehicle production will reach 25.784 million units in 2030, which is about 13.8 times that of 2020. In 2020, overseas new energy vehicle production reached 1.87 million units, an increase of 63% year-on-year. According to the automotive group of CITIC Securities Research Department, overseas new energy vehicle production will reach 10.13 million units in 2025, CAGR of 36.1% in 2021-2025, and it is expected that the output of new energy vehicles will be 2.95 million units in 2021, 4.22 million units in 2022, and 25.784 million units in 2030. Assuming that the amount of NdFeB for pure electric passenger cars, other new energy passenger cars (hybrid passenger cars), and other new energy vehicles (commercial vehicles) other than passenger cars is 3.4 kg, 2.6 kg and 10 kg respectively, the output of overseas new energy vehicles in 2030 is expected to bring 78,000 tons of NdFeB permanent magnet material consumption.
Domestic new energy vehicle production and sales continued to remain strong. In 2020, the mainland's new energy vehicle production was 1.37 million units, an increase of 13.3% year-on-year, we expect that in 2021/2022/2023 will exceed 348/480/5.9 million units, from 2021 to 2025 China's new energy vehicle production will maintain a CAGR of about 39.0%, and it is predicted that China's new energy vehicle production will reach 13 million units in 2025 and 19.5 million units in 2030. According to the amount of NdFeB for pure electric passenger cars, other new energy passenger cars (hybrid passenger cars), and other new energy vehicles (commercial vehicles) in addition to passenger cars, the amount of NdFeB for single vehicles is also calculated at 3.4 kg, 2.6 kg and 10 kg respectively, and it is expected that China's new energy vehicle production will bring 60,000 tons of NdFeB permanent magnet material consumption in 2030.
Industrial motors: policy support, new breaking points in demand
Driven by policies, the penetration rate of rare earth permanent magnet motors is expected to continue to increase. The Ministry of Industry and Information Technology and the State Administration of Market Supervision jointly issued the "Motor Energy Efficiency Improvement Plan (2021-2023)" on November 22 this year, encouraging the use of energy-saving motors represented by rare earth permanent magnet motors, expanding the green supply of high-efficiency energy-saving motors, etc., and proposing that by 2023, the annual output of high-efficiency energy-saving motors will reach 170 million kilowatts, and the proportion of in-service high-efficiency energy-saving motors will reach more than 20%, achieving annual electricity savings of 49 billion kWh, equivalent to annual savings of 15 million tons of standard coal and carbon dioxide emissions 28 million tons.
Promoting the replacement of energy-efficient motors will effectively promote the mainland to reduce energy consumption and save resources. According to the data of the Ministry of Industry and Information Technology's "2013 Industrial Energy Conservation and Green Development Special Action Implementation Plan", the motor is the terminal with the largest power consumption in the industrial field in the mainland, and in 2013, the industrial motor consumption in the mainland accounted for 75% of the total industrial electricity consumption, and the operating efficiency was more than ten percentage points lower than the advanced level of foreign countries. If you improve the energy efficiency of the motor by 1 percentage point, you can save 26 billion kWh of electricity per year. According to the estimates of the Ministry of Industry and Information Technology, the annual power saving potential of the national electric power system is 130 billion to 230 billion kWh, which is about equivalent to the power generation of 2 to 3 Three Gorges power stations.
Industrial motors are expected to become the second largest downstream application field of rare earth permanent magnets in the future. According to the data of the Rare Earth Industry Association, the penetration rate of rare earth permanent magnet motors in 2018 was only about 4.33%. 2019 and 2020 are calculated according to a permeability rate of 4%, and the corresponding consumption of NdFeB is about 0.82 and 0.91 million tons, respectively. Assuming that the penetration rate of rare earth permanent magnet motors in 2023/2024/2025 will reach 10%, 15% and 20%, respectively, the unit consumption of NdFeB will be calculated at 700 kg/MW, corresponding to 2.4/3.6/48,000 tons of NdFeB consumption, respectively.
Wind power: "double carbon" power, demand set sail again
The most important component of the wind power generation system is the wind turbine as the core, and the rare earth permanent magnet, as the key metal raw material for direct-drive permanent magnet generators, will continue to increase demand under the drive of carbon neutrality. Permanent magnet wind turbines take the fan impeller to drive the generator rotation directly, compared with the traditional turbine wind turbines, the drive system and gearbox are eliminated, avoiding the failure and maintenance of related equipment in operation. At the same time, the permanent magnet wind turbine has no excitation windings, and there is no collector ring and brush on the rotor, so the structure is simple and the operation is reliable.
Inverter air conditioning: energy efficiency standards have been improved, and the penetration rate has increased year by year
The penetration rate of inverter air conditioners continues to increase, further driving NdFeB consumption. On July 1, 2020, the mainland began to implement the "Energy Efficiency Limit Value and Energy Efficiency Level of Room Air Conditioners" (GB 21455-2019), and the three-stage frequency fixing under the original standard and some three-stage frequency conversion with poor energy efficiency are facing elimination. According to industry online data, China's inverter air conditioning output in 2020 was 83.364 million units, and the output of household air conditioners continued to account for more than 80% of the global share. According to the rare earth industry association announced that the amount of magnetic material required for each inverter air conditioner is 0.1 kg, the production of inverter air conditioners in 2020 will consume a total of about 8300 tons of rare earth permanent magnet materials. The CAGR of inverter air conditioning production in 2013-2020 was 12.78%, and its proportion of total air conditioning production increased from 32.65% in 2013 to 57.53% in 2020. From January to October 2021, the national output of inverter air conditioners and household air conditioners was 9011 and 130.52 million units, respectively, accounting for about 70% of the inverter air conditioners. It is expected that the CAGR of 2021/2022/2023 household air conditioning production will be maintained at about 4%, the proportion of inverter air conditioners will reach 70%/80%/90%, the output will reach 1.1/1.3/150 million units, and the demand for rare earth permanent magnet materials will reach 1.10/1.30/152 million tons, respectively.
Energy-saving elevators: the penetration rate increases, and the global demand may exceed 10,000 tons
High-performance rare earth permanent magnet materials are the core components of energy-saving elevators. With the development of urbanization, the demand for elevators is increasing, in the survey statistics of the electricity consumption of hotels, office buildings, etc., elevator electricity consumption accounts for more than 17% to 25% of the total electricity consumption. The elevator used in the traction machine is mainly a permanent magnet synchronous motor and a traditional asynchronous motor, the VVVF elevator using the permanent magnet synchronous host can be included in the A class, the transmission efficiency of the permanent magnet synchronous motor is high, the energy consumption is low, and the high-performance NdFeB permanent magnet material is the core component of the energy-saving elevator traction machine.
The development of energy-saving elevators has driven the demand for NdFeB permanent magnet materials. According to the China Elevator Association, China accounted for more than 70% of the world's elevator manufacturing business in 2019, and it is estimated that the global elevator production in 2019 will be about 1.68 million units. According to the data of the elevator recruitment network, the proportion of energy-saving elevators in the total output of elevators in the mainland has increased from 30% in 2006 to about 85% in 2020. Assuming that in 2021/2022/2023, the year-on-year growth rate of China's elevator production is 15%/5%/5%, and the proportion of energy-saving elevators is 86%/87%/88%, accounting for about 70% of the global total, it is expected that the global energy-saving elevator will consume 1.14/1.21/1.28 million tons.
Consumer electronics: the amount of stand-alone machines is small, and the total shipment volume is large
NdFeB materials are widely used in consumer electronics. NdFeB permanent magnet materials have high magnetic energy product, high compaction density and other characteristics, excellent magnetic performance, in line with the development trend of miniaturization, lightweight, thin and light consumer electronic products, is widely used in voice coil motor (VCM), vibration motor, camera, micro microphone, micro speaker, Bluetooth headset, sensor application and wireless charging and other mobile phone function devices. The unit consumption of NdFeB materials in mobile phones and laptops is about 2.5g and 3g. It is estimated that in 2021/2022/2023, smartphone and laptop shipments will reach 13.2, 13.5, 1.37 billion units and 2.2, 2.4 and 260 million units, respectively, and the combined demand for NdFeB will reach 0.40, 0.41 and 0.42 million tons.
Total demand estimate: Global demand for NdFeB will reach more than 360,000 tons in 2030
On the whole, driven by new energy vehicles, wind power generation, industrial permanent magnet motors and inverter air conditioners, consumer electronics and other fields, it is expected that the global demand for NdFeB will reach more than 360,000 tons in 2030. 1 kg of NdFeB corresponds to: praseodymium oxide = 0.28 * 1.22 kg, dysprosium oxide = 0.02 kg, terbium oxide = 0.0126 kg. According to the calculation of praseodymium oxide, dysprosium oxide and terbium oxide accounting for 21%, 4% and 1% of rare earth oxides respectively, and assuming that the proportion remains basically unchanged before 2030, it is expected that the demand for rare earth oxides will reach 183,000 to 711,000 tons in 2030.
3 Supply inflection point: the pattern is beginning to appear, and the upstream concentration may continue to increase
From the perspective of global supply, according to Frost & Sullivan's data, the total output of rare earth permanent magnet materials in the world in 2020 is 217,400 tons, of which 205,500 tons of sintered neodymium NdFeB, accounting for 94.5%. It is estimated that by 2025, the total output of rare earth permanent magnet materials and the output of sintered NdFeB will reach 31.02 and 296,700 tons, respectively, with an average compound growth rate of 7.4% and 7.6% from 2020 to 2025. Global production of high-performance NdFeB permanent magnet products increased from 35,000 tons in 2015 to 66,000 tons in 2020, with an average annual compound growth rate of 13.4%. Frost & Sullivan predicts that by 2025, the global production of high-performance NdFeB permanent magnet products will reach 130,000 tons, with an average compound growth rate of 14.4% from 2020 to 2025.
The pattern of rare earth permanent magnets has begun to appear, and the total output has increased steadily
The production of rare earth permanent magnets in mainland China has increased steadily, with an average compound growth rate of 7.8% from 2015 to 2020. At present, the mainland rare earth permanent magnet industry has formed an industrial cluster dominated by Ningbo, Beijing and Tianjin region, Shanxi, Baotou and Ganzhou in Zhejiang. According to Frost & Sullivan's data, the total output of rare earth permanent magnet materials in the mainland in 2020 will reach 196,200 tons, of which 185,500 tons of sintered NdFeB magnets, accounting for 94.5%. According to Frost & Sullivan's forecast, the mainland rare earth permanent magnet production will reach 284,200 tons in 2025, with an average compound growth rate of 7.7% from 2020 to 2025. The output of high-performance rare earth permanent magnets in mainland China will reach 46,200 tons in 2020 and is expected to reach 105,100 tons by 2025.
Rare earth price fluctuations rise to eliminate low-end products and small enterprises, improve product structure, and thicken the performance of industry leaders. When the price of upstream rare earths rises sharply, the operating costs of small enterprises rise sharply, the profit margins are compressed, and the low-end NdFeB products are more replaceable, and the price increase makes the market demand direction turn to ferrite and other magnetic material substitutes, coupled with the increased difficulty of raw material procurement and the weak downstream price increase capacity, small enterprises gradually withdraw from the market. Leading enterprises in the industry with strong bargaining power have benefited from the rise in raw material prices, and profits are expected to increase and thicken by raising the prices of high-end NdFeB products to downstream enterprises.
Rare earth quotas are expected to increase, and the supply pattern is developing well
The upstream rare earth supply-side reform has been steadily promoted, and production indicators have been issued to regulate supply. Since 2017, the Ministry of Industry and Information Technology and the Ministry of Natural Resources have begun to control the total amount of rare earth mining, crack down on black rare earths, shut down small rare earth mines, and regulate rare earth mining. In 2021, the mainland rare earth mining index is 168,000 tons, and the smelting and separation index is 162,000 tons, all of which will be distributed to six major rare earth groups such as China Rare Earth, Northern Rare Earth, Xiamen Tungsten, Southern Rare Earth, and Guangdong Rare Earth. At present, the increase in overseas rare earth upstream supply mainly originates from the United States, Myanmar and Australia, with a total output of 85,000 tons (rare earth oxides) in 2020, and the short-term increase is expected to be limited due to the long development cycle of overseas projects. Under the continuous improvement of downstream demand, assuming that the growth rate of China's rare earth mining and smelting separation quota in 2022 is the same as that of 2021 (+20%), it is expected that the mining and smelting separation indicators will reach 202,000 tons and 194,000 tons, further alleviating the tight supply of rare earths.
Rare earth permanent magnet faucet production expansion, industry concentration or continuous improvement
At present, the domestic rare earth magnetic material industry has formed rare earth magnetic material processing enterprises such as Zhongke Sanhuan, Ningbo Yunsheng, Zhenghai Magnetic, Yingluohua, Dadi Bear, Jintian Copper, Galaxy Magnet, Antai Technology, Youyan New Material, etc. In addition to the main adhesive NdFeB of Galaxy Magnet, the rest of the companies mainly produce sintered NdFeB products. Xiamen Tungsten has the upstream mining and smelting capacity of rare earths, and has been involved in the downstream high-performance rare earth permanent magnet materials business, and Northern Rare Earth and Guangsheng Nonferrous Metals, which are also upstream rare earth mining and smelting manufacturers, are also actively laying out their own downstream magnetic materials business.
Capacity and output: The existing high-performance NdFeB magnetic material production capacity is more than 90,000 tons
At present, the rare earth permanent magnet industry has a total production capacity of more than 90,000 tons of high-performance NdFeB magnetic materials, and the finished product output in 2020 is more than 36,000 tons. According to the magnetic material production capacity planning announced by each company, it is expected that by 2025, the total production capacity of high-performance NdFeB magnetic materials will exceed 190,000 tons, further making up for the demand gap.
Revenue and profit: cost transmission ability is strong, profitability is stable and rising
Large-scale magnetic material manufacturers have strong price conductivity, and under the sharp rise in rare earth prices since the beginning of 2021, they still maintain a stable and rising profit. In 2021, the revenue and profit performance of companies in the magnetic material industry is expected to far exceed the 2020 level. In the first three quarters of 2021, the top three operating income and attributable net profit (excluding Antai Technology and Youyan New Materials) were Zhongke Sanhuan / Jinli Permanent Magnet / Yingluohua (49.1 / 29.2 / 2.60 billion yuan) and Ningbo Yunsheng / Jinli Permanent Magnet / Zhongke Sanhuan (3.7/3.5 / 210 million yuan).
From the gross and net profit margins in the first three quarters of 2021 (excluding Antai Technology and Youyan New Materials), Galaxy Magnet ranked first, with gross profit margins and net profit margins as high as 35% and 24%, Ningbo Yunsheng and Jinli Permanent Magnet ranked second and third, and gross profit margins and net profit margins were 27%/23% and 14%/12% respectively. Only from the perspective of rare earth permanent magnet business, in the first half of 2021, Zhongke Sanhuan, Jinli Permanent Magnet and Ningbo Yunsheng ranked in the top three in operating income and gross profit, respectively, 44.28/570 million yuan, 22.89/555 million yuan, 20.33/461 million yuan; Galaxy Magnet, Jinli Permanent Magnet and Ningbo Yunsheng ranked in the top three gross profit margins, 34.47%, 24.24% and 22.66% respectively.
Considering the production capacity and planning of companies in the rare earth permanent magnet industry, calculating the net profit attributable to the mother of the tonnage production capacity in the first three quarters of 2020 and 2021, it can be found that benefiting from the increase in downstream demand, the profitability of companies in the magnetic material industry in the first three quarters of 2021 has been significantly improved. Combined with the production capacity planning of each company, the level of net profit attributable to the mother from 2022 to 2025 is flexibly calculated, and Zhenghai Magnetic Material and Ningbo Yunsheng will fully benefit from the expansion of production capacity, and it is expected that the net profit attributable to the mother in 2025 will reach 4.4 to 7.3 and 2.7 to 750 million yuan respectively.
R & D and technology: highlight the heavy rare earth reduction technology, and continuously reduce costs
The company in the magnetic material processing industry has a strong accumulation of technology, and is committed to reducing the amount of heavy rare earths in NdFeB magnetic materials and continuously reducing the cost of raw materials. From the perspective of the number of effective patents and the value of TOP5 patents, Yingluohua ranks first in the industry (Jinli permanent magnet and dadi bear do not have TOP5 patent value data), with 911 and 90.75 million yuan respectively. From the perspective of R&D investment, in the first three quarters of 2021, Ningbo Yunsheng and Zhenghai Magnetics' total R&D expenditure and total R&D expenditure accounted for the top in the industry, with 1.7/140 million yuan and 6.5%/5.9% respectively. From the perspective of the ratio of R & D personnel to R & D personnel, Yingluohua, Ningbo Yunsheng and Jinli permanent magnet ranked three in the number of R&D personnel, 436, 393 and 357 respectively; Zhenghai Magnetics, Ningbo Yunsheng and Galaxy Magnet ranked in the top three in the proportion of R&D personnel, 15%, 13% and 12% respectively.
Product structure: wind power, automobile, industrial mainly
On the whole, the downstream demand for magnetic products of companies in the industry is mainly wind power, automobile and industry. Zhongke Sanhuan's magnetic material products applied to new energy vehicle motors accounted for 25%; Ningbo Yunsheng's revenue in industrial applications, consumer electronics, cloud computing and large data, and new energy vehicles accounted for 46%, 33%, 14%, and 7% (2020 revenue proportions), respectively; Zhenghai Magnetic's products accounted for more than 50% of the automotive market (of which energy-saving and new energy vehicles accounted for more than 30%); Yingluohua's magnetic materials Accounted for more than 30% of the downstream applications in the wind power field (about 30%). High-end audio and smart home appliances (about 10% respectively); The application areas of Dadi Bear products are: industrial motors (45%), wind power generation (11%), automotive industry (21%, of which new energy vehicles are 8%), consumer electronics (19%), and others account for about 4%; Galaxy Magnet Automotive Magnet sales revenue accounts for about 50%; Aetna Technology's magnetic materials business involves applications such as automotive magnets, industrial motors and high-end consumer electronics; and the research and development of new materials and magnetics business focuses on electroacoustics.
Overseas expansion: Japan and Germany are the mainstays, and the United States and Europe are planning to expand
At present, overseas rare earth permanent magnet production capacity is mainly concentrated in the hands of Hitachi Metal in Japan, Tokyo Electric (TDK) in Japan, Shin-Etsu Chemical and Vacuum Melting Company (VAC) in Germany. According to Frost & Sullivan's statistics, the production of rare earth permanent magnet materials in the mainland will account for more than 90% of the total global output in 2020, and the rest of the output will be divided by the above overseas leaders. In recent years, European and Japanese enterprises have continued to lay out in China, such as hitachi metal and Zhongke Sanhuan joint venture set up "Hitachi Metal Sanhuan Magnetic Materials (Nantong) Co., Ltd." in 2015, and In 2012, Xinyue Chemical set up "Xinyue (Changting) Technology Co., Ltd." in Fujian (with an annual output of 3,000 tons of rare earth permanent magnets), making the global NdFeB production capacity almost all concentrated in China and Japan. Up to now, Japan has the largest number of NdFeB patents in the world, and Tokyo-based Hitachi Metal is the world's leading company in NdFeB permanent magnet production technology, with more than 600 sintered NdFeB patents.
The United States and Europe are plotting to expand their rare earth magnetic material production capacity to reduce their dependence on China. On December 9, 2021, MP Materials in the United States announced that it will establish a 1,000-ton-per-year magnetic material plant in the United States and sign a supply agreement with General Motors to power 500,000 electric vehicles and is expected to start production in 2023. At the same time, General Motors and Germany's VAC announced on December 9 that they plan to build a new magnetic material plant in the United States, which is expected to start production in 2024. At the same time, Neo Performance Materials, a Canadian producer of bonded rare earth magnetic materials, also plans to build a new magnetic material plant in Estonia with an annual capacity of 1,000 tons. On the whole, the production capacity of overseas rare earth permanent magnet materials is small, and the source of heavy rare earths is constrained, the cost competition is poor, and the development resistance is larger.
4 Investment analysis
Rare earth is a non-renewable resource, a key element of a variety of functional materials in the field of high technology, and a national heavyweight and a strategic highland on the mainland. Mainland rare earth reserves, production, exports and consumption are all leading in the world, and have the most complete rare earth industry chain in the world. In recent years, the supply pattern of rare earths has been continuously optimized, and the demand for downstream magnetic materials, hydrogen storage materials, catalytic materials and other fields has been continuously improved. Among them, rare earth permanent magnets as the largest downstream area, the future in the new energy vehicles, wind power, industrial motors and other demand driven, the magnetic material industry will enter a new round of capacity expansion cycle. Leading enterprises are expected to expand production capacity with their own upstream resources or cost advantages and enhance the profitability of the industry.
Rare earth upstream competition pattern or will continue to optimize, rare earth permanent magnet materials as the industrial chain in the downstream consumption value of the largest proportion of the field, the future in the new energy vehicles, industrial motors, wind power and other fields of continuous pull, downstream demand or will continue to increase.
——END——
[Xing Yanjun.]
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