Since the fourth quarter of 2016, the domestic prices of rare earth products rose. Some analysts believe that the current round of Rare Rare prices are mainly affected by production quotas, rare earth purchasing and storage, as well as to combat rare earth illegal mining and other supply side policy factors. With the industry supply side of the reform process of deepening, rare earth prices is expected to continue.
Product prices continue to rise
May 15, the South Rare Earth Group released the latest heavy rare earth single oxide listing price, europium oxide prices rose 20,000 yuan to 620,000 yuan / ton, or 3.3%; terbium oxide rose 10 million to 3.5 million / ton, Or 2.9%; lutetium oxide rose 10 million to 5.1 million yuan / ton, or 2.0%; yttria rose 1,000 yuan to 21,000 yuan / ton, or 5.0%.
Prior to this, the North Rare Earth Group has released the third price increase notice, continue to increase the price of praseodymium neodymium rare earth products. Among them, praseodymium neodymium oxide rose 4,000 yuan to 297000 yuan / ton, or 1.37%; lanthanum rose 550 yuan to 15220 yuan / ton, or 3.75%; cerium oxide rose 340 yuan to 11670 yuan / ton, or 3%.
According to Societe Generale Securities statistics, as of May 15, the domestic terbium oxide, praseodymium oxide, neodymium oxide and lanthanum oxide and other products prices were up 19.13%, 13.08%, 10.42% and 6.67%.
Affected by price factors, rare earth industry listed companies appear reversed. In the first quarter of 2017, the operating income of rare earth in the north was 1.999 billion yuan, an increase of 142.94%; net profit of 74.46 million yuan, an increase of 1018.7%; Rising colored, Minmetals rare earth net profit of 1.72 million yuan and 8.33 million yuan, Are achieved year on year profitability.
The above-mentioned companies in the financial report pointed out that the first quarter of 2017, the company’s operating income increased year on year mainly due to the rebound in market prices of rare earth products and product sales increased due.
Supply side shrink
It is argued that the rapid contraction of the supply side is the direct cause of the rising price of rare earth in the current round.
Since 2011, the supply of rare earth industry, a serious surplus, the problem of cheap sales, industry profitability continued to decline.
According to statistics, in 2015, the overall loss of rare earth industry 600 million yuan, 2016 January-October the overall loss of 160 million. According to the latest data released by Chilean Consulting, China’s rare earth exports in 2010 were about 46,700 tonnes, up 34.2% year on year, but the export value was only $ 342 million, down 8.4% year-on-year.
Some analysts have pointed out that the “black rare earth” is a large number of rare earth industry caused by excess capacity of the important reasons.
In 2016, China’s rare earth supply is about 168,000 tons, while the national rare earth quota index of about 105,000 tons, calculated, “black rare earth” production close to 63,000 tons, accounting for about 60% of the legitimate supply.
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November 2016, Ministry of Industry and Information Technology United Ministry of Ministry of Land and Resources, Ministry of Environmental Protection, Ministry of Public Security and other departments issued a document from December 2016 to April 2017 in the country to carry out special action against illegal acts of rare earth violations.
Since then, against rare earth illegal special action throughout the country continue to advance. On May 9, 2017, the Ministry of Industry and Information Technology of the Ministry of Industry and Industry (Rare Earth Office) organized a meeting on the coordination of inter-ministerial coordination mechanism for rare metals. The meeting informed the progress of the special action phase of the Rare Earth Illegal Regulations.
According to the minutes of the meeting, since the country launched a special action against illegal acts of rare earth violations, a total of 23 provinces (autonomous regions) people’s government organizations on the relevant areas of rare earth mining, smelting separation, comprehensive utilization and trade enterprises to carry out a comprehensive inspection, Enterprises 415, identified 61 illegal clues, has been handled according to 23, and 38 are being processed.
During the period, the Ministry of Industry and Information Technology in conjunction with the relevant departments of the news media and experts to Guangdong, Hebei, Henan, Shandong and other provinces (regions) rare earth enterprises to carry out on-site verification of the problems found, have requested local verification as soon as possible.
Minutes show that through the early order to rectify, rare earth industry production and management situation has improved. From January to March of 2017, the income from the main business of the rare earth industry increased by 21% year on year and the profit increased by 29% year on year. As of the end of April, lanthanum oxide, neodymium oxide, terbium oxide and other products prices year on year growth of 35%, 5%, 31%.
At the same time, rare earth purchasing and storage continued to carry out effective support for the formation of rare earth prices.
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According to the China Securities Research Report, since December 13, 2016, rare earth industry, the State Reserve has completed three rounds of bidding, the cumulative realization of storage and storage of more than 6400 tons. Among them, in January 2017, the second round of the State Reserve tender purchasing and storage of 2,000 tons, the tender price than the previous overall floating 2% -8%.
March 28, the third round of rare earth State Reserve tender landing. The tender information shows that the total amount of the tender for the State Reserve is about 3,000 tons, of which neodymium oxide tender price of about 27 million / ton, the number of 220 tons; dysprosium oxide price of about 1.25 million / ton, the number of 450 tons; The price of about 3.1 million yuan / ton, the number of 178 tons; europium oxide tender price of about 500,000 yuan / ton, the number of 170 tons.
Statistics show that as of March 28, the domestic price of europium oxide tender than the end of 2016 increased by 18.48%; terbium oxide, neodymium oxide tender prices were higher than the end of 2016 growth of 7.74% and 5.51%.
Insiders said that the review of the three purchasing and storage, storage reserves and purchasing and storage prices are gradually increased, the industry generally feel the frequency and size of storage and storage is different from previous years, showing a high frequency, small size, and each micro-premium , Which is conducive to the formation of positive market expectations, help the market confidence and the continued recovery of the economy.
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Price is expected to continue
The market generally believe that the current rare earth industry overall order has been improved, product prices are expected to continue to rise.
Societe Generale Securities pointed out in the research report, through the mining, smelting and separation of indicators to further focus on the black and high pressure on the rare earth, the six rare earth group’s voice is increasing, the price control will gradually show.
Huatai Securities believes that the six rare earth group 100% market concentration, the formation of the two north and south two rare earth price alliance to maintain market stability, supply shrinkage demand steadily, purchasing and storage to help the historical accumulation of inventory consumption, rare earth industry has been formed.
From the supply side, in October 2016, the Ministry of Industry issued the “Rare Earth Industry Development Plan (2016-2020)” (hereinafter referred to as “Development Plan”). According to the development plan, by 2020, the domestic rare earth mining will be controlled below 140,000 tons, the average annual growth rate should not be higher than 7.4%; mine mining, smelting separation and comprehensive utilization of resources into the six group management, Large-scale rare earth enterprise groups, no longer add mining rights.
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April 13, 2017, the Ministry of Industry issued the “2017 first batch of rare earth production total control plan notice” (hereinafter referred to as “control plan”). According to the control plan, 2017, the domestic rare earth mineral products planned production of 52,500 tons. Among them, the light rare earth project production 43550 tons, medium heavy rare earth production of 8950 tons; the same period, the domestic smelting separation products planned production of 50075 tons. There was no significant change in the quota between the provinces and autonomous regions, and the mining targets were obtained directly from the corresponding rare earth groups.
At the same time, “black rare earth” is expected to strike against normal. February 2017, the Ministry of Commerce and other seven departments jointly issued “on the promotion of important product information traceability system construction guidance” proposed to carry out rare earth enterprises retrospective pilot, the establishment of rare earth special invoices, rare earth products export declarations, business files and other Information sharing mechanism to rare earth mineral products, rare earth smelting separation products as the focus, to production and operation accounting, product packaging logo as the main content, to accelerate the construction of rare earth product traceability system to achieve full traceability.
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May 9, the Ministry of Industry in the organization of rare metals inter-ministerial coordination mechanism liaison meeting pointed out that to further increase coordination and cooperation, problem-oriented in-depth promotion of special rectification work, joint disciplinary illegal enterprises, held by the implementation of regulatory requirements Responsibilities of the relevant units and personnel responsibilities; the next step, the relevant departments will form the inspection team to carry out supervision of the relevant provinces (autonomous regions).
From the demand side, the new application of the continuous mining is expected to bring support for rare earth prices.
According to the domestic rare earth consumption structure, at present, about 35% -40% of China’s rare earth is used as permanent magnet material. Rare earth permanent magnetic materials not only for the traditional home appliances, electric bicycles, luggage deduction and other fields, but also for wind power, new energy vehicles, home appliances, energy-saving elevators and other emerging areas.
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January 23, 2017, the Ministry of Industry and Development and Reform Commission, Ministry of Science and Technology and the Ministry of Finance jointly developed a “new material industry development guide” (hereinafter referred to as “Development Guide”). According to the development guide, the future should speed up the development of new and efficient semiconductor lighting, rare earth luminescent materials technology development, breaking the amorphous alloy in rare earth permanent magnet energy-saving motor application of key technologies, vigorously develop rare earth permanent magnet energy-saving motor and supporting rare earth permanent magnet materials.
Minsheng Securities pointed out in the research report that the future demand side should focus on high-end materials. From the high-end rare earth permanent magnet material demand structure, wind power, new energy vehicles, energy efficient motor is high-end permanent magnet material three growth points. Among them, the high-end materials in the field of new energy automotive applications worthy of attention.
In addition, rare earth in the motor vehicle exhaust purification catalyst, catalytic combustion, petroleum catalytic cracking and other fields of broad prospects.
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According to the Minsheng Securities Research Report, from the development of the industry, the domestic automobile exhaust gas purification catalyst industry is in the growth period, one fifth of each year in the car need to replace the catalyst, the market prospect is huge, urgent demand.
At the same time, rare earth exhaust gas purification catalyst used in rare earth is mainly cerium oxide, praseodymium oxide and lanthanum oxide mixture, rare earth exhaust gas purification catalyst low price, good thermal stability, high activity, long life, and With anti-lead poisoning characteristics, there is still no more suitable than the rare earth elements to do the car exhaust catalyst, which is low risk of substitution.
Some brokerage analysts expect the future demand for rare earth industry growth will stabilize at 6% or more, which is expected to increase the demand for rare earth coke is expected to reach 15% -20%.
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