The supply of the mine is expected to weaken, the inventory of magnetic materials has almost bottomed out, the rare earth has risen sharply, and the rare earth ETF has brushed a new high in the past 5 months [SMM Review]
SMM, April 8: Driven by the expected weakening of the supply of rare earth mines, the price of mine holders is reluctant to sell, the inventory of downstream magnetic material enterprises has almost bottomed out, and the demand for replenishment and the increase in corporate procurement, the spot price of rare earth has risen sharply for a long time. Praseodymium neodymium oxide, dysprosium oxide and terbium oxide rose by 6.61%, 7.45% and 10.31% respectively in one trading day. Such an objective rise in the spot market also once supported the concept of rare earth permanent magnets and rare earth ETF (516150) in the capital market to strengthen against the trend, and the unit net value of rare earth ETF rose to 0.993 intraday on the 8th, which is its highest point since November 22, 2023. However, with the increase in the decline of the broader market, the concept of rare earth permanent magnet and rare earth ETF finally closed down on the 8th, and finally the concept of rare earth permanent magnet fell 0.81%, and ETF fell 1.84%.
Message plane
The Fujian Provincial Department of Industry and Information Technology and the Department of Finance recently revised the "Fujian Provincial Rare Earth and Related Products Production and Application Incentive Measures" and jointly issued the "Fujian Province Rare Earth New Materials Production and Application Incentive Measures" to further promote the high-quality development of the rare earth new materials industry. The "Measures" shall be implemented from the date of promulgation and shall be valid until December 31, 2026, and the "Incentive Measures for the Production and Application of Rare Earth and Related Products in Fujian Province" shall be repealed at the same time.
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According to data from the General Administration of Customs compiled by SMM, China's imports of rare earth metal ores shrank by 41% year-on-year from January to February this year, and the import of rare earth metal ores mainly came from light rare earth ores in the United States.
On April 1, Northern Rare Earth released the listed prices of rare earth products in April 2024, and the prices of all rare earth products were flat month-on-month. Lanthanum oxide was reported at 4,100 yuan/ton, unchanged from March 2024, and cerium oxide was reported at 7,600 yuan/ton, unchanged from March 2024. Praseodymium neodymium oxide was reported at 365,700 yuan/ton, unchanged from March 2024, neodymium oxide was reported at 374,000 yuan/ton, unchanged from March 2024, praseodymium neodymium metal was reported at 455,000 yuan/ton, unchanged from March 2024, and neodymium metal was reported at 465,000 yuan/ton, unchanged from March 2024. >> Click here for details
The supply of ion ore shrinks, and terbium oxide soars by more than 10% in one day
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In the rare earth spot market, on April 3, many varieties rose from the upstream ore end to oxides to metals and NdFeB blanks. According to SMM's quotation, the ore end: rare earth carbonate, yttrium-europium-rich ore and monazite ore have risen, of which the average price of yttrium-europium-rich ore is 182,000 yuan/ton, an increase of 7.69% compared with the previous trading day. In terms of oxides, the average price of praseodymium neodymium oxide was 387,000 yuan/ton, up 24,000 yuan/ton from the previous trading day, an increase of 6.61%; the average price of dysprosium oxide was 2,020 yuan/kg, up 140 yuan/kg from the previous trading day, an increase of 7.45%; the average price of terbium oxide was 6,150 yuan/kg, up 575 yuan/kg from the previous trading day, an increase of 10.31%.
According to SMM research: the rare earth market has been relatively active recently, and the group procurement has driven the price increase in the case of the ore end holders holding the price and the inventory of downstream magnetic material enterprises has almost bottomed out. Considering that Myanmar is about to enter the rainy season, the supply of rare earth ion ore is difficult to increase in the short term, according to the Leshan rare earth separation plant, the rare earth metal ore from the United States has also been significantly reduced, and the shortage of supply at the mine end may continue for a period of time.
Institutional sounds
The research report of Guojin Securities pointed out that Northern Rare Earth released the listed price of rare earth products in April 2024, and the prices of all rare earth products were flat month-on-month, ending the continuous decline. Due to the high prices in 2021-2022, the supply of overseas mines has faced a bottleneck, considering that the current price has fallen to a low position and the economy of imported mines has been significantly reduced, we judge that it will be difficult for rare earth imports in 2024 to maintain a high base in 2023, and the import volume of rare earths from January to February 2024 will decline significantly year-on-year as scheduled. The Ministry of Finance and the Ministry of Industry and Information Technology issued the "Notice on Carrying out the Pilot Work of New Technological Transformation Cities in the Manufacturing Industry", which provides financial support for the construction of smart factories and the renovation of old equipment. In the medium and long term, as the supply of overseas mines faces bottlenecks and the growth rate of domestic quotas slows down, rare earth prices are expected to gradually rise. The target of the magnetic material link beneficiaries: Jinli permanent magnet (strong performance through the cycle, robots contribute to the growth space);
According to the research report of China Securities Construction Investment, the listed price of rare earth products in April 2024 was flat month-on-month, which was the first time that the listing price in 2024 was lowered for 3 consecutive months, and the confidence of the spot market was boosted, in addition, the price of medium and heavy rare earth also rose greatly. Due to the sharp drop in rare earth prices at the beginning of the year, rare earth mining enterprises are in an upside-down state, the market is reluctant to sell, the spot circulation is tight, rare earth prices have reached the bottom stage, with the improvement of orders in the consumer market, rare earth prices are expected to be strong in the short term. The Ministry of Industry and Information Technology (MIIT) has promoted large-scale equipment renewal, benefiting rare earth magnets, energy-saving motors and motors, and magnetic material recycling enterprises.
Huafu Securities Research Report pointed out that the listing price of northern rare earth was flat, and the supply disturbance of heavy rare earth ore in Myanmar led to a rebound in price. The listing price of northern rare earth in March was flat to support market confidence, affected by the news that some Myanmar rare earth miners chose not to mine and shut down their rare earth mines due to financial pressure, and the market is expected to weaken the follow-up import volume of rare earth ores, especially for the price of medium and heavy rare earths.
AVIC Securities commented on the research report of Jinli Permanent Magnet and pointed out: product volume increase and price decrease, through the rare earth cycle: In 2023, the company's domestic/foreign business will achieve revenue of 54.4/1.25 billion yuan (-14.3%/+52.69% year-on-year), and the rapid growth of overseas business is mainly due to the rapid growth of new energy vehicles and wind power export business in Europe. In terms of production and sales, the company's production and sales of high-performance ammonium, iron and boron will reach 15,154 l tons/15,122 tons in 2023 (+18.59%/+25.69% year-on-year). Profitability is gradually bottoming out, and subsequent improvements are expected. The first batch of rare earth indicators in 2024 will be issued: the total control indicators of the first batch of rare earth mining, smelting and separation in 2024 will be 135,000 tons and 127,000 tons respectively (+12.5%/+10.4% year-on-year); Among them, the mining index of light rare earth ore reached 124,860 tons (+14.5% year-on-year), and the mining index of medium and heavy rare earth ore reached 10,140 tons (-7.3% year-on-year), and the growth rate of light rare earth mining index was significantly higher than that of medium and heavy rare earths. Fundraising projects help break through capacity bottlenecks. The growth of demand for downstream new energy vehicles has laid an incremental foundation for rare earth permanent magnets, and the company's first-mover expansion to the humanoid robot market is expected to meet the next industry outlet and create a new growth curve.