Rare earth industry hard to return

Starting in mid-November, as the supply of rare earth companies tightened, the price of rare earths rose across the board, triggering expectations of the warming of the rare earth industry.

The industry believes that the current rebound in rare earth prices or short-term phenomenon, due to the long-term low prices of rare earth and the downstream consumer market shrink, the future growth of the performance of the industry companies will also face greater pressure.

According to relevant media reports, since the beginning of November, rare earth varieties such as yttrium oxide, lanthanum oxide, and yttrium iron have experienced a significant increase in prices. Among them, the largest increase in cerium oxide, up to nearly 35%; while the increase in cerium oxide, niobium iron is also more than 30%. In addition, lanthanum oxide, yttrium oxide, antimony metal and other species all experienced a rise of more than 10%.

Li Yongliang, an analyst at Caitong Securities rare earth industry, believes that companies represented by Baotou Steel Rare Earth [32.72 -0.15% shares in Bar Research Report] and Minmetals have taken initiatives to limit production of certain rare earth smelting and separation industries, and publicly listed the acquisition of rare earth oxides. Things and a series of measures to help stabilize the price of rare earth raw materials, resulting in the gradual increase in the price of metal materials such as cesium.

According to industry insiders, whether this round of market conditions can be maintained depends on whether the current round of price rebound can continue into the first quarter of next year.

Although the rebound in the prices of rare earth raw materials has triggered people's expectations of the industry's warming, analysts believe that the future growth of related companies will also face greater difficulties. The data shows that the five listed companies with NdFeB permanent magnet material production and processing as the main business achieved cumulative operating revenue of 8.499 billion yuan in the first three quarters of this year, a year-on-year decrease of 7.43%.

In addition, the current price of rare earth raw materials in China has fallen by 60% to 70% compared with the peak price of last year. The continued decline in the prices of rare earth raw materials has also inhibited the recovery of demand for NdFeB downstream applications. It is understood that high-performance neodymium-iron boron is widely used in wind power generation, energy-saving elevators, energy-saving air-conditioning and new energy vehicles and other industries.

A relevant person in the wind power motor manufacturing industry said that since the beginning of this year, the price of wind turbines has been falling, taking into account the product demand is not very good, so companies are interested in controlling the cost of raw materials, adjusting the technical route to reduce the proportion of rare earth permanent magnet materials used.

“Because it is difficult to withstand the diving of raw material prices, some rare earth permanent magnet processing enterprises in the south have already closed down,” said a rare earth raw material trader who declined to be named to the reporter.

Experts from the China Institute of Rare Earths also believe that the rare earth prices are closely related to the recessionary economic environment and the demand for rare earths has been shrinking. The task of integration and merger and reorganization of the rare earth industry is also very arduous, and the rare earth market will be difficult to recover during the year.