How to interpret the output data of rare earth materials released by the Ministry of industry and information technology last week?

The Ministry of industry and information technology released the output data of rare earth functional materials in the first half of the year, which can be described by a word of mixed happiness and sorrow. Only rare earth permanent magnet materials and tail gas catalysts kept rising, while rare earth polishing, rare earth hydrogen storage and rare earth catalytic cracking catalysts showed a large decline, which is very consistent with the price trend of rare earth products of different categories. The rise of rare earth permanent magnet materials has stimulated more supply of rare earth resources and intensified the surplus of lanthanum cerium and other products which are relatively rich. Although the growth of tail gas catalytic purification hedged some excess, even so, lanthanum cerium and other products still showed a significant decline, which dragged down the profit growth of rare earth upstream enterprises in the first half of the year.

At present, the income growth of rare earth functional material enterprises is generally higher than that of rare earth upstream raw material enterprises. However, rare earth functional material manufacturers are closer to the application terminal, can quickly adjust production capacity and product specifications, and have stronger bargaining power. We believe that a healthy industrial chain ecology should be more sensitive to transmitting market information to the upstream. Otherwise, the time difference between the upstream and downstream may lead to a stage loss in a certain link, and eventually lead to a state in which the capacity of this link is difficult to maintain in the future. The upstream and downstream coordination mechanism promoted by the Ministry of industry and information technology is a good measure, but there are still many problems to be solved. In the future, China's rare earth industry will compete in the global market, and a strong coordination mechanism will provide important support.