Special Report on Rare Earth Industry: Demand Reconstruction and Supply Orderly, Rare Earth Industry Rides on the Wind (Report attached)

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Throughout the world, my country’s rare earth resources are the triple crown in quantity, quality and technology.

In terms of rare earth reserves, my country accounts for 36.7% of the world’s total, far exceeding that of other countries. In terms of rare earth production, my country accounts for 60.0% of the world’s total rare earth production, ranking first in the world. In terms of resource endowment, my country’s resources are superior to the world’s, which is reflected in the completeness of rare earth minerals and elements. Among them, the northern light rare earth mines have large reserves and are easy to scale mining with cost advantages, and the south medium and heavy rare earth mines have large reserves and low radioactivity, easy to mine and economical Well, the strategy makes a lot of sense. In terms of smelting and separation technology, my country’s smelting and separation technology leads the world, and the output of smelting and separation accounts for about 90% of the world.

Supply pattern optimization, my country may build global rare earth pricing power

On the whole, the supply of rare earths in my country is determined by policy indicators. By reducing mining rights + cracking down + buying and storing to regulate supply, and continuously optimize the industry structure, my country’s rare earth supply is expected to maintain a reasonable and orderly growth in the future. However, the new overseas mines are still in the early stage of development, and the increment is limited. By reviewing the process of the establishment of the iron ore pricing system by the four major iron ore enterprises, we believe that my country’s rare earth mining enterprises have met the advantageous conditions of resources + output + cost, and my country’s rare earth enterprises are expected to imitate the four major iron ore enterprises to establish iron ore mines The path of pricing power to establish rare earth pricing power on a global scale.

Demand reconstruction and supply gap continue, optimistic about the persistence of high prices under logic changes

We judge that praseodymium neodymium oxide will continue to be in short supply from 2022 to 2025. Compared with the past pulse-like price increases, we believe that the logic of this round of rare earth price increases has changed, and we are optimistic about the persistence of high prices: in the past, rare earth purchases and storage, crackdowns, etc. have not fundamentally changed the supply and demand relationship of rare earths, and rare earth prices have risen. The hype component accounts for a large proportion, so the price fluctuates at a low level after a large drop in about a year, showing the characteristics of an event-driven impulse price increase. The new round of rare earth price hikes lasted significantly longer than the past, and there was no obvious correction. The logic lies in the reconstruction of the demand side of rare earths to change the relationship between supply and demand to support prices. In the future, the supply side will grow in an orderly manner, while the demand side will start to explode driven by new energy sources. We are optimistic about the sustainability of the rare earth price center at a high level.

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