Rare Earth Prices May Stabilize At A High Level, Weakening The Impact On Magnetic Material Manufacturers

Rare earth raw materials are the main cost component of NdFeB. Before the sharp rise in the current round of prices, rare earth accounted for about 65-75% of the cost of NdFeB. Metal neodymium increased from 355000 yuan / ton in May 2022 to 1450000 yuan / ton. The quotation of mainstream NdFeB 35h brand NdFeB was 467000 yuan / ton. According to the calculation of the content of rare earth in NdFeB at 28% - 30%, the cost of rare earth accounted for 90% of the sales price of qinfeb, which was significantly higher than that in 2019.

The impact of different stages and ranges of rare earth price rise on the downstream demand of magnetic materials is different. In the early stage of the rise, the industrial chain has differences on the sustainability of rare earth price rise, and the transmission capacity of magnetic material cost is relatively weak.

The rising trend of rare earth prices was determined and rose continuously, but the rising cost of magnetic materials did not significantly curb demand, and the downstream began to accept cost transmission.

In the third stage, the price of rare earth continued to rise sharply, the cost of medium and low-end magnetic materials was difficult to conduct, and some downstream demand turned to other types of magnetic materials. At this stage, the price of rare earth showed a certain platform period or even callback.

At present, it is in the fourth stage of rare earth price. There are no alternative products in the demand field of medium and high-end rare earth magnetic materials. The rise in the cost of rare earth can be made up by reducing the comprehensive cost in the later stage. The demand drives the accelerated rise of rare earth price and is expected to peak. At the current stage, magnetic material manufacturers realize the smooth transmission of costs by optimizing order cycle, adjusting product and customer structure, and locking rare earth costs in advance.