"The Tian family has fewer idle months, and the spring ploughing people are twice busy." At present, this sentence is also more appropriate in the field of rare earth magnetic materials. Under the expectation of rapid growth of downstream demand, listed companies of magnetic materials are expanding their production one after another.
On February 24 this year, Ningbo Yunsheng Co.Ltd(600366) issued an additional issuance plan, saying that it plans to raise 1.08 billion yuan to build a 15000 ton high-performance rare earth permanent magnet project in Baotou. On February 23, Beijing Zhong Ke San Huan High-Tech Co.Ltd(000970) allotment was successfully issued, and the raised funds were used for the new construction and technical transformation projects of Ningbo base and the new construction projects of Ganzhou base.
At the end of December 2020, Yantai Zhenghai Magnetic Material Co.Ltd(300224) once announced that it planned to spend 3 billion yuan to build an 18000 ton high-performance Nd-Fe-B permanent magnet material production base in Nantong, Jiangsu Province. Since this year, the company's production capacity has begun to release.
"The company has been in full production, and the products are in short supply. In order to speed up the construction of production capacity, we stuck to new projects from Monday to Friday last year, and we didn't even rest on weekends this year." An executive of a listed magnetic material company told the Securities Daily that although it is tired, the company's projects are progressing smoothly. It is expected that new production capacity will be released in succession this year and next, and the previously planned production capacity may be realized in advance.
head magnetic material enterprise busy expanding production
At present, the products that magnetic material enterprises are busy expanding production are mainly neodymium iron boron magnets, which are widely used in motors in automobile, household appliances, energy, machinery, medical treatment, aerospace and other industries, as well as components that need to produce strong gap magnetic field.
A senior person in the rare earth permanent magnet industry told the Securities Daily that the consumption of high-end NdFeB magnetic materials corresponds to the advanced manufacturing level of a country. For example, Germany and the United States have been among the top two countries in the world in the use of high-end NdFeB magnetic materials for many years; The global rare earth supply and magnetic material deep processing industry are mainly concentrated in China.
In recent years, due to the rapid growth of downstream demand, magnetic material enterprises have expanded their production. When the reporter of securities daily visited Yantai Zhenghai Magnetic Material Co.Ltd(300224) earlier, he found that the company's production workshop was busy and workers were working overtime.
Yantai Zhenghai Magnetic Material Co.Ltd(300224) relevant person said, "we have laid out the field of new energy vehicles earlier, with sufficient orders in recent years and full production. Automotive customers account for 56% of the company's product orders. With the further increase of penetration in the future, it is expected that the proportion of orders in the automotive field will further increase."
Jl Mag Rare-Earth Co.Ltd(300748) 's staff once told the media that its capacity utilization rate has been above 95% in recent four years Beijing Zhong Ke San Huan High-Tech Co.Ltd(000970) also told the reporter of Securities Daily that at present, there are abundant orders and high capacity utilization. The production expansion plan is formulated according to customer orders and the development prospect of the industry.
"Magnetic material enterprises have expanded their production one after another, mainly due to strong downstream demand." Qiu Zuxue, vice president of Minsheng Securities Research Institute and chief analyst of metal and materials industry, told Securities Daily that in the process of China's energy structure transformation, the demand for magnetic materials has increased significantly. The increase in the demand for magnetic materials is very obvious in both wind power and new energy vehicles.
"In addition, the energy-saving demand in the field of industrial motors is also very strong." According to Qiu Zuxue, the motor energy efficiency improvement plan (20212023) jointly issued by the Ministry of industry and information technology and the State Administration of market supervision and administration proposes that by 2023, the proportion of in-service high-efficiency and energy-saving motors will reach more than 20%, while the current proportion is less than 5%, and the incremental demand is still very obvious.
Wu Longkun, an analyst of Shanghai Ganglian E-Commerce Holdings Co.Ltd(300226) rare and expensive business unit, believes that there will be strong demand in terminal fields such as new energy vehicles and wind power in 2022, and the orders of large magnetic material enterprises are basically full. It is expected that the demand for high-performance rare earth permanent magnet materials will continue to grow at a high speed in the next five years. Although relevant enterprises are busy expanding production, it takes time to expand production, and the situation of short supply will still exist in the short term.
magnetic material industry or accelerated reshuffle
Up to now, there are more than 200 Nd-Fe-B permanent magnet material manufacturers in China. However, due to the low industrial concentration, the annual output of most enterprises is less than 1500 tons. Among them, Beijing Zhong Ke San Huan High-Tech Co.Ltd(000970) , Yantai Zhenghai Magnetic Material Co.Ltd(300224) , Ningbo Yunsheng Co.Ltd(600366) , Jl Mag Rare-Earth Co.Ltd(300748) and several other listed companies have annual production capacity of more than 10000 tons, showing serious polarization in the industry as a whole.
Driven by downstream demand, head magnetic material enterprises are actively expanding production. Qiu Zuxue told reporters, "the expansion of production in this industry is very strong, and most of the leading enterprises will double their production capacity after expansion."
"In addition, many magnetic material enterprises are busy expanding their production and are also considering seizing market share." Yang Wenhua, rare earth analyst at Shanghai Nonferrous Metals network, told the Securities Daily, "benefiting from the strong demand in the downstream market, many enterprises planned to expand production last year. However, due to insufficient inventory before the festival, many enterprises chose to expand production after the Spring Festival."
The aforementioned Yantai Zhenghai Magnetic Material Co.Ltd(300224) related person said, "the company has an annual production capacity of 18000 tons, the Nantong project plans to build a new production capacity of 18000 tons, and the total production capacity of the company will reach 36000 tons after the project is completed. At present, the new production capacity project is progressing smoothly. It is estimated that 6000 tons of production capacity will be added this year and next year, and the release progress of 6000 tons of production capacity will be determined according to the market situation."
Beijing Zhong Ke San Huan High-Tech Co.Ltd(000970) at present, it has four sintered Nd-Fe-B permanent magnet manufacturers, with an overall design annual production capacity of about 20000 tons. After the completion of this allotment project, it is expected to form a new production capacity of about 10000 tons. In addition, the production expansion projects of Ningbo Yunsheng Co.Ltd(600366) , Jl Mag Rare-Earth Co.Ltd(300748) and other listed enterprises are also advancing in an orderly manner. However, for most small and medium-sized enterprises, it will be difficult to share this industry feast because they do not have advantages in cost control, technology, capital and customer certification.
Wu Longkun said that due to the influence of patents, most Chinese NdFeB permanent magnet material manufacturers cannot directly export related products to the international market on a large scale; Downstream customers are not willing to take the risk of using non patented NdFeB magnets and their components due to legal risks.
In addition, the rising price of rare earth also forms a huge cost pressure on the magnetic material production of small and medium-sized enterprises. According to the data of Shanghai Nonferrous Metals network, on February 15, the main variety of light rare earth praseodymium neodymium oxide closed at 1.1 million yuan / ton, a year-on-year increase of 134.8%, a new high since 2012.
"With the expansion of production of leading enterprises in the industry and the rapid rise of rare earth prices, many small enterprises will be phased out, and the industry reshuffle may intensify." A person in the magnetic material industry said.
"The rise in rare earth prices will devour part of the profits of magnetic material enterprises, but the impact on the price of downstream end products is limited." Yang Wenhua explained to reporters, "rare earth raw materials account for a large proportion of the production cost of motors, and the cost of new energy vehicle motors and direct drive wind turbines even accounts for more than 40%. However, the cost of rare earth raw materials in terminal products is still small. Therefore, although the price of rare earth has increased greatly, it has not caused too much demand change."
