Recently, rare earth prices have continued to rise sharply. according to the China Rare Earth Industry Association, the rare earth price index on February 15, 2022 was 426.8, up 6.2 points from yesterday, reaching a record high.
Inner Mongolia Baotou Steel Union Co.Ltd(600010) pointed out that "the price of praseodymium and neodymium oxide has a great impact on the price of rare earth concentrate". According to the data of China Rare Earth Industry Association, in January, the average price of praseodymium and neodymium oxide was 915300 yuan / ton, up 7.70% month on month. The price of praseodymium and neodymium oxide continues to rise after the Spring Festival. At present, the price of praseodymium and neodymium oxide has exceeded 1 million yuan per ton.
rare earth prices hit new highs, and the annual report predicts an increase of
In 2021, the price of rare earth has experienced a big market, and the annual increase of praseodymium and neodymium oxide has doubled. Thanks to this, the performance of rare earth listed companies is generally greatly expected. According to the data, six of the seven Rare Earth concept stocks that have disclosed the performance forecast are pre increase. Among them, China Northern Rare Earth (Group) High-Tech Co.Ltd(600111) with the highest increase is expected to increase the net profit attributable to shareholders of listed companies by 488.58% - 507.79%. After the Xiamen Tungsten Co.Ltd(600549) year with the smallest increase, the performance express was released again. It is expected that the net profit attributable to shareholders of listed companies will be about 1.18 billion yuan in 2021, with a year-on-year increase of about 92.04%.
From the disk, the share price of China Northern Rare Earth (Group) High-Tech Co.Ltd(600111) has been adjusted for a long time. Up to the time of publication, the total market value is 162.4 billion. Compared with the market value with the highest value of 220 billion, the market value of China Northern Rare Earth (Group) High-Tech Co.Ltd(600111) has shrunk by 10 billion. Other rare earth enterprises also adjusted.
the production capacity is at the top, and one product is hard to find!
On the one hand, most of the praseodymium neodymium / dysprosium terbium products imported by China come from Myanmar. Myanmar's customs closure has affected the demand for rare earth imports. According to SMM research, due to the severe epidemic situation in Myanmar, Myanmar's imported mines continued to be tight at the beginning of the year. China's neodymium iron boron waste, which accounts for 38% - 40% of the supply of rare earth upstream oxides, may decline by 20% - 30% in February due to factors such as inverted cost of waste enterprises, difficult to find waste in stock, shutdown and maintenance during the Spring Festival, etc. The tightening of imported ore and Nd-Fe-B waste at the supply end has made the upstream supply of rare earth in China continue to be tense.
In addition, the Ministry of industry and information technology and the Ministry of natural resources recently issued a notice that the total control indicators of the first batch of rare earth mining, smelting and separation in 2022 are 100800 tons and 97200 tons respectively.
Northeast Securities Co.Ltd(000686) pointed out that the Ministry of industry and information technology issued the first batch of Rare Earth total amount control indicators in 2022. The increase of the indicators is in line with expectations, and the supply and demand is tight, which is expected to exist for a long time. The increase of index is in line with expectations. The country is still relatively restrained in releasing the rare earth supply index, and the index increment is still concentrated in light rare earths.
strong demand, rare earth to meet the mismatch between supply and demand? Organization: reconstruction of valuation system + continuous realization of profits
On the demand side, Huabao Securities believes that after the Spring Festival, there is strong demand in terminal areas such as wind turbines and new energy vehicles, and orders increase. Large magnetic material enterprises are full of orders. although the first batch of mining indicators of rare earth mines were issued, it coincided with the rainy season, and the mining of medium and heavy rare earth mines in the South was difficult. It is expected that the supply of medium and heavy rare earth oxides in China will not increase in the first quarter. the widening gap between supply and demand makes magnetic material enterprises strongly bullish on the price of rare earth raw materials . Some magnetic material enterprises lock prices with upstream enterprises. The contradiction in the rare earth market has changed from the low acceptance of prices by downstream enterprises to the contradiction between supply and demand of rare earth. The rare earth sector is expected to continue to strengthen, and it is suggested to focus on industry leading companies.
Northeast Securities Co.Ltd(000686) pointed out that from theme investment to industrial reform, we should pay attention to the historic opportunity of restructuring the valuation system of rare earth sector. 1) In the long run, the valuation system of rare earth sector may face reconstruction under industrial reform. at present, rare earth can be compared with lithium in 2015-2016 and cobalt in 2018. The upstream material properties of new energy are gradually strengthened, and it is expected to reproduce the logic of the high demand for lithium and cobalt in history in the future. At the same time, the characteristics of strict policy control and high concentration of the industry make the supply end of rare earth even better than lithium and cobalt , and the ability to cross the cycle may be stronger in the future, The valuation system of rare earth sector is facing reconstruction.
2) in the medium term, the supply will not meet the demand in the next three years, and the prosperity of the industry is expected to continue to improve. The downstream electric vehicle track has a long slope and thick snow. At the same time, wind power, air conditioning and other fields are also blooming at many points, which will fully open the demand space for rare earth. The supply elasticity outside China is weak. It is expected that the tension between supply and demand of rare earth praseodymium and neodymium will continue in the next three years, and the prosperity of the industry is expected to continue to improve.
The agency believes that at the current time point, rare earths have changed from the resource products with the worst pattern to the resource products with the best pattern. The whole industry is ushering in an epic turning point, and the valuation system is expected to be reconstructed, and with the upward movement of rare earth price center, leading enterprises are expected to continue to realize high profits, so they should grasp the opportunity to revalue the value of rare earth core assets with pricing power.
