China's rare earth prices hit a new high.
Data from the China Rare Earth Industry Association showed that the rare earth price index was 427 on February 21, the same as last Friday, and this figure has reached an all-time high.
The 21st Century Business Herald reporter noted that since April 2020, the rare earth price index has continued to rise from 129.30, up 230.2% so far.
However, specific to the prices of major light rare earth products and heavy rare earth products, the increase is also different.
In April 2020, the average price of praseodymium and neodymium oxide of light rare earth products was 261400 yuan / ton, that of metal praseodymium and neodymium was 331300 yuan / ton, that of dysprosium oxide of heavy rare earth products was 1787700 yuan / ton, and that of dysprosium iron was 1774100 yuan / ton.
By January 2022, the average price of praseodymium and neodymium oxide will rise to 915300 yuan / ton, the average price of metal praseodymium and neodymium will become 1124500 yuan / ton, the average price of dysprosium oxide will be 2982900 yuan / ton, and the average price of dysprosium iron will reach 2971900 yuan / ton.
The 21st Century Business Herald reporter found that the price increase of light rare earth products was higher than that of heavy rare earth products.
China Northern Rare Earth (Group) High-Tech Co.Ltd(600111) hand cooling
The price of rare earth is not only rising sharply, but also the total amount of mining, smelting and separation is increasing.
According to the indicators issued by the Ministry of industry and information technology and the Ministry of natural resources, the total control indicators of the first batch of rare earth mining, smelting and separation in 2022 are 100800 tons and 97200 tons respectively.
In the first batch of rare earth mining total amount control indicators in 2020 and 2021, the mineral product indicators are 66000 tons and 84000 tons respectively, and the smelting separation indicators are 63500 tons and 81000 tons respectively.
Rare earth prices were high, and the industry inventory fell to an all-time low.
According to the data of Baichuan Yingfu, as of February 18, 2022, the inventory of praseodymium and neodymium oxide was about 3351 tons, a year-on-year decrease of 19.21%, and from the situation in recent three years, the inventory of praseodymium and neodymium oxide is only at the quantile level of 9.9% in recent three years.
"We are speeding up the inventory turnover, but accelerating the turnover speed can not be seen from the inventory amount alone. The increase of the amount may be the rise of the price." Xiamen Tungsten Co.Ltd(600549) (600549) relevant people told the 21st Century Business Herald reporter.
According to the source, Xiamen Tungsten Co.Ltd(600549) although there are rare earth mining and smelting separation indicators, the proportion of purchased raw materials accounts for the vast majority. "We never sell primary processed products of raw materials, and we are enterprises that earn added value of deep processing."
Even though the price of rare earth has increased significantly, the news about the decline of enterprise inventory continues to be seen in the media, including Xiamen Tungsten Co.Ltd(600549) , Jl Mag Rare-Earth Co.Ltd(300748) (300748. SZ), Yantai Zhenghai Magnetic Material Co.Ltd(300224) (300224. SZ) and other listed companies, when interviewed by the 21st Century Business Herald reporter on February 21, said that there is no difficulty in rare earth procurement and there is sufficient supply.
"We will maintain a reasonable inventory and purchase on demand according to product orders and raw material prices. The current inventory is similar to that in the past. There has always been a source of goods in the market, and the purchase is very smooth." Yantai Zhenghai Magnetic Material Co.Ltd(300224) relevant people said.
The industry giant China Northern Rare Earth (Group) High-Tech Co.Ltd(600111) (600111. SH) also took the initiative to cool down.
According to the listing price announced by China Northern Rare Earth (Group) High-Tech Co.Ltd(600111) in February 2022, the listing price of various products decreased slightly compared with the previous month. Among them, the listing price of praseodymium and neodymium oxide was 816000 yuan / ton, down 0900 yuan / ton; The listing price of metal praseodymium and neodymium was 994500 yuan / ton, down 0500 yuan / ton.
Compared with the market price, the listing price of China Northern Rare Earth (Group) High-Tech Co.Ltd(600111) is relatively lower by more than 10%.
"The monthly listing price is the company's sales price." China Northern Rare Earth (Group) High-Tech Co.Ltd(600111) staff said.
China Northern Rare Earth (Group) High-Tech Co.Ltd(600111) on February 21, it also said through the interactive platform that the move was to "avoid the continuous rise of raw material prices, force the downstream application fields to reduce and remove rare earths, and then destroy the upstream and downstream industrial chain of rare earths".
The relevant person in charge also told the reporter of the 21st Century Business Herald that the national policy is to achieve the goal of "double carbon", and it is impossible for the restrictions on rare earth raw materials to affect the healthy and orderly development of the industry.
Another reason pointed out by China Northern Rare Earth (Group) High-Tech Co.Ltd(600111) is that "the rising price of rare earth will accelerate the expansion of overseas production capacity and increase the competitive pressure of the company in the international market".
price and volume rise together to boost performance
Although the supply of rare earths has increased significantly, the demand is also strong.
Huajin securities research report said that under the background of global low-carbon and electrification, new energy vehicles, industrial motor energy efficiency improvement, wind power, Siasun Robot&Automation Co.Ltd(300024) have replaced consumer electronics and become the main driving force of rare earth permanent magnet demand, bringing a leap in magnitude. It is expected that the average annual compound growth rate from 2022 to 2025 will be about 26%.
However, how much the increment of rare earth supply side in 2022 is still unknown.
The 21st Century Business Herald reporter found that the total control indicators of rare earth mining and smelting separation in 2021 were 168000 tons and 162000 tons respectively, and the first batch of rare earth mining and smelting separation indicators accounted for half of the annual indicators. The supply of rare earth is expected to increase by about 20% in 2021 and 2022, which is similar to that in 2022.
Rare earths belong to the products produced under the total amount control of the state. According to the documents of the Ministry of industry and information technology and the Ministry of natural resources, "rare earths are the products under the total amount control and management of the state, and no unit or individual shall produce without and beyond the indicators".
The impact of the rise in rare earth prices on the profits of relevant enterprises is obvious.
According to the annual performance express of Xiamen Tungsten Co.Ltd(600549) 2021, its rare earth business realized an operating revenue of about 4.804 billion yuan, a year-on-year increase of about 56.98%; The total profit was about RMB 229 million, with a year-on-year increase of about 154.34%. The main reason is that the price of rare earth products rises with the increase of raw material prices.
The performance of China Northern Rare Earth (Group) High-Tech Co.Ltd(600111) has improved by leaps and bounds.
According to its pre increase announcement, it is expected that the net profit in 2021 will increase by 4.068 billion yuan to 4.228 billion yuan compared with the same period of last year, with a year-on-year increase of 488.58% to 507.79%.
China Northern Rare Earth (Group) High-Tech Co.Ltd(600111) said that the substantial year-on-year increase in operating performance was driven by the optimization of the upstream supply side and the support of downstream wind power, new energy vehicles and other end consumer demand. The supply and demand situation of major rare earth products in the market was improved, which promoted the price volatility of major products in the rare earth market, increased transaction activity, and increased the operating rate and capacity utilization rate of enterprises.
In addition to the significant increase in the performance of rare earth enterprises in upstream raw materials, the performance growth of Listed Companies in permanent magnet materials is also very considerable. For example, Jl Mag Rare-Earth Co.Ltd(300748) it is expected that the net profit in 2021 will increase by 65% to 100% over the same period of the previous year, Beijing Zhong Ke San Huan High-Tech Co.Ltd(000970) (000970. SZ) the net profit in 2021 will increase by 155.18% to 278.9% year-on-year, and Earth-Panda Advanced Magnetic Material Co.Ltd(688077) (688077. SH) will increase by 191.5%.
cost transmission to downstream
The performance of upstream raw material enterprises has increased significantly, thanks to the large amount of rare earth and the rise in prices, while the net profit of listed companies of permanent magnet materials in the middle reaches has soared, which is closely related to the increasing demand.
"The profitability increased significantly in 2021, mainly due to the double rise of production and sales, and the strong growth of demand in downstream application fields." Earth-Panda Advanced Magnetic Material Co.Ltd(688077) the staff said.
Listed companies surveyed, including Xiamen Tungsten Co.Ltd(600549) , Jl Mag Rare-Earth Co.Ltd(300748) , Yantai Zhenghai Magnetic Material Co.Ltd(300224) , said that the price rise of rare earth raw materials had little impact on their product sales and profit level.
"The price of our products is a cost plus. If the price of raw materials rises, the price of products will rise accordingly." The aforementioned Yantai Zhenghai Magnetic Material Co.Ltd(300224) relevant persons disclosed to the 21st Century Business Herald reporter.
"There must be demand in the downstream, and the price will rise in the upstream. This reflects that the market demand is strong from one side, indicating that the applications at the downstream demand side, including downstream products, are being accepted by the majority of consumers, which is a good thing for the whole industry." The aforementioned Xiamen Tungsten Co.Ltd(600549) relevant person said.
The terminal application of rare earth is also expanding.
"The market will change every year due to technological innovation. In 2020, permanent magnet materials will burst out in the field of air conditioning. It is due to the implementation of new energy efficiency standards. Many air conditioning manufacturers have switched to compressor routes dominated by rare earth permanent magnets. The application of new energy vehicles increased significantly last year, and before that, it was in the field of wind power." The aforementioned Jl Mag Rare-Earth Co.Ltd(300748) relevant person in charge told the 21st Century Business Herald reporter.
According to the Jl Mag Rare-Earth Co.Ltd(300748) announcement, its revenue in the field of energy-saving variable frequency air conditioning will reach 878 million yuan in 2020, an increase of 107.99% over the previous year and nearly 60% in 2021; In the field of new energy vehicles and auto parts, the operating revenue increased by about 220% year-on-year in 2021; In 2019, the revenue in the field of wind power reached 855 million yuan, a significant increase of 121.4% over the previous year. The revenue in this field remained stable in 2020 and 2021.
"Cars account for the majority of our products. The cost of permanent magnet materials in a passenger car is about 1000 yuan. The price transmission of raw material price rise has no impact on sales. At present, the company's orders and production are in a saturated state." The aforementioned Yantai Zhenghai Magnetic Material Co.Ltd(300224) related person said.
For rare earth applications with "industrial vitamins" and "industrial monosodium glutamate", the interviewed listed companies said that under the background of the "double carbon" goal, with the increasing demand in downstream areas, the magnetic material industry will enter a new round of capacity expansion cycle.
