What support does rare earth supply shortage and price rise rely on?

In recent weeks, the overall heat of the domestic rare earth market is high, and the market prices of various products rise as a whole. In particular, some rare earth products increased significantly, and the prices of praseodymium and neodymium oxide products increased significantly. From the price trend of rare earth market, the market price of praseodymium and neodymium was corrected and the market price of dysprosium and terbium rebounded in mid and late June. Then, since mid July, the market prices of light and heavy rare earth have risen across the board, and the supply of goods in the market is relatively tight. The shortage of ore is the external situation of metal plants and separation plants. In the early stage, the shortage or oversold of metal plants are reflected at this stage, The shortage of metal supply is becoming more and more obvious.

According to the feedback from all parties in the market, the inventory of praseodymium and neodymium, especially oxide, is low, and the market demand still exists. In the near future, whether it is to catch up with the high transaction or wait-and-see, the terminal production continues, and the replenishment demand is only a matter of time. In addition, with the arrival of high temperature in summer, all localities are relatively strict in the control of industrial power consumption. The production of rare earth enterprises may be affected, and the tight supply of some rare earth products is difficult to ease in the short term.

So, what support does the tight price rise of rare earth goods rely on? There are two answers: on the one hand, it benefits from the rapid growth of domestic economy in the first half of 2021. According to the data of the National Bureau of statistics, in the first half of this year, China's economy grew by 12.7% year-on-year, ranking first among the world's major economies. After the "big test" of the epidemic, China's economy is on the road to recovery, improving quarter by quarter and moving forward steadily, showing strong toughness and vitality. This has played an important role in promoting the stable development of rare earth industry. On the other hand is the rational return of rare earth value, and the role of rare earth industry in domestic economic structure is gradually emerging. At the same time, it is also a concrete embodiment of the supply-demand relationship in the rare earth market. With the favorable national policies, the gradual improvement of confidence in the rare earth market and the strong demand of downstream industries, the price of rare earth rebounded.

Rare earth is a national strategic resource. After years of renovation, the industry has changed qualitatively from quantitative change and the industrial order has returned. Domestic upstream rare earth leading enterprises can not only expand market share through the effective growth of rare earth quota, but also realize the double benefits of scale growth and cost reduction by increasing the proportion of self-produced mines or purchasing low-cost domestic mines, Finally, with the long-term stable high of rare earth price center, the performance of many enterprises increased significantly.

In fact, the state has listed rare earth materials in the strategic mineral catalogue, which is an important measure to enhance the strategic value of rare earth. With the advent of the intelligent era, new energy vehicles, 5g smart phones, intelligent robots, smart appliances and so on continue to be popularized, and the growth rate of demand for rare earths will further increase in the future.

Take the NdFeB industry as an example. Since 2000, the global NdFeB industry has developed rapidly and the industry technology has made continuous breakthroughs. In view of China's rich rare earth raw materials and low manufacturing cost, the international production capacity has been gradually transferred to China. At the same time, China's rare earth resource advantages and industrial policies have made China the largest producer and exporter of Nd-Fe-B permanent magnet materials in the world.

With the development of new energy vehicles, the demand for magnetic materials of new energy vehicle motors has also become the main growth point of the demand for high-end NdFeB magnetic materials, that is, the demand for praseodymium neodymium oxide has increased rapidly. Therefore, there is a broad market space for high-performance Nd-Fe-B in the field of new energy vehicles. Industry insiders predict that in the next five years, new energy vehicles will enter the stage of accelerated penetration, and the demand for Nd-Fe-B will reach more than 56000 tons, and the domestic demand will reach about 24000 tons.

In the first half of this year, China's economy continued to recover steadily and the supply and demand cycle was smooth, which laid a good foundation for the operation of the rare earth industry in the second half of this year. With the implementation of the regulations on the administration of rare earth and other policies or the gradual introduction of new policies in the second half of the year, it is expected to ensure the medium and long-term high-quality development of the rare earth industry, so as to promote the continuous rise of rare earth prices.