Rare earth industry ushered in a blockbuster news!
On the afternoon of March 4, the official website of the Ministry of industry and information technology announced that in view of the continuous rise and high market prices of rare earth products, the rare earth office interviewed key rare earth enterprises such as China rare earth group, China Northern Rare Earth (Group) High-Tech Co.Ltd(600111) group and Shenghe Resources Holding Co.Ltd(600392) company on March 3.
The meeting called for strengthening industry self-discipline and not participating in market speculation and hoarding; We should give full play to the leading role of demonstration, promote and improve the pricing mechanism of rare earth products, and jointly guide product prices to return to rationality.
Data show that since May 2020, rare earth prices have started this round of rebound. After a short correction in May and June 2021, it has soared all the way since July. In February this year, the rare earth price index hit an all-time high and reached 431 points on February 24, up 233% from early May 2020.
Recently, rare earth prices remain high and volatile. According to the China Rare Earth Industry Association, the rare earth price index was 429.4 on March 4, up 0.2 points from the previous day.
will rare earth prices cool down after key enterprises are interviewed
key rare earth enterprises interviewed
At 3:11 p.m. on March 4, the Department of raw materials industry of the Ministry of industry and information technology announced that in view of the continuous rise and high market prices of rare earth products, the rare earth office interviewed China rare earth group, China Northern Rare Earth (Group) High-Tech Co.Ltd(600111) group, Shenghe Resources Holding Co.Ltd(600392) company and other key rare earth enterprises on March 3.
The meeting required that relevant enterprises should earnestly enhance their awareness of the overall situation and responsibility, correctly grasp the current and long-term, upstream and downstream relations, and ensure the safety and stability of the industrial chain and supply chain; We should strengthen industry self-discipline, further standardize the production and operation, product trading and trade circulation of enterprises, and shall not participate in market speculation and hoarding; We should give full play to the leading role of demonstration, promote and improve the pricing mechanism of rare earth products, jointly guide product prices to return to rationality, and promote the sustainable and healthy development of rare earth industry.
doubled in 8 months, up 233% in 22 months
an important background for the key rare earth enterprises to be interviewed this time is the continuous soaring price of rare earth products
According to the data disclosed by China Rare Earth Industry Association, since July 2021, rare earth prices have started a new round of rise. On July 1, 2021, the rare earth price index was 205.46 points. By February 24, 2022, the rare earth price index had soared to a record high of 430.97 points, up 109.7% in less than eight months.
If the time is extended, the current round of rebound in rare earth prices will start in May 2020 and accelerate the rise from November of that year. After a short correction in May and June 2021, rare earth prices have soared all the way since July. By February this year, the rare earth price index had reached an all-time high and reached 431 points on February 24, up 233% from the beginning of May 2020.
In April 2020, among light rare earths, the average price of praseodymium and neodymium oxide is only 261400 yuan / ton, and the average price of metal praseodymium and neodymium is 331300 yuan / ton; Among the heavy rare earth oxides, the mainstream average price of dysprosium oxide in the market is 1787700 yuan / ton, and the mainstream average price of dysprosium iron is 1774100 yuan / ton.
By February 2021, the average price of praseodymium and neodymium oxide in light rare earths has reached 1059800 yuan / ton, up 15.79% month on month, and the average price of metal praseodymium and neodymium has reached 1310600 yuan / ton, up 16.54% month on month; The average price of heavy rare earth and dysprosium oxide was 3.1078 million yuan / ton, up 4.19% month on month, and the average price of dysprosium iron was 3.0978 million yuan / ton, up 4.24% month on month.
rare earth related listed companies have good performance
benefited from the rise in rare earth prices, and the performance of listed companies related to A-share rare earths has also improved by leaps and bounds
Longtou China Northern Rare Earth (Group) High-Tech Co.Ltd(600111) recently released a performance forecast. It is estimated 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 in 2021, with the optimization of upstream supply side and the support of downstream wind power, new energy vehicles and other terminal consumer demand, the supply and demand situation of major rare earth products in the market has been improved, which has driven the price volatility of major products in the rare earth market higher, the transaction activity has increased, and the operating rate and capacity utilization rate of enterprises have increased, The operation quality and efficiency of rare earth production and processing enterprises have been improved.
Shenghe Resources Holding Co.Ltd(600392) recently, it is also estimated that the net profit in 2021 will be 1.05 billion yuan to 1.2 billion yuan, an increase of 727 million yuan to 877 million yuan over the same period of last year, an increase of 225% to 271% over the same period of last year. During the reporting period, affected by market supply and demand and other factors, the prices of major rare earth products increased year-on-year, and the company’s production and sales increased year-on-year, resulting in a significant increase in profits.
Xiamen Tungsten Co.Ltd(600549) released the performance express and achieved a revenue of 31.842 billion yuan in 2021, with a year-on-year increase of 67.91%; The net profit was 1.179 billion yuan, a year-on-year increase of 92.04%. During the reporting period, the company’s tungsten and molybdenum business realized an operating revenue of about 10.957 billion yuan, a year-on-year increase of about 45.39%; The total profit was about 1.4 billion yuan, a year-on-year increase of about 74.61%.
In terms of rare earth business, in 2021, Xiamen Tungsten Co.Ltd(600549) the sales volume of rare earth deep-processing products increased. At the same time, due to the rise in the price of rare earth products caused by the increase in the price of raw materials, the operating revenue and profit of rare earth products increased significantly. The company’s rare earth business achieved a revenue of about 4.8 billion yuan, a year-on-year increase of 56.98%; The total profit was about RMB 229 million, with a year-on-year increase of about 154.34%.
For other rare earth listed companies, Rising Nonferrous Metals Share Co.Ltd(600259) is expected to increase net profit by 156% – 215% year-on-year in 2021, Beijing Zhong Ke San Huan High-Tech Co.Ltd(000970) is expected to increase net profit by 155% – 279% year-on-year in 2021, Ningbo Yunsheng Co.Ltd(600366) is expected to increase net profit by 153% – 204% year-on-year in 2021, Earth-Panda Advanced Magnetic Material Co.Ltd(688077) is expected to increase net profit by 174% – 207% year-on-year in 2021, Jl Mag Rare-Earth Co.Ltd(300748) is expected to increase net profit by 65% – 100% year-on-year in 2021.
organization: the high boom of rare earth industry may continue
Some research institutions pointed out that the downstream of rare earth is mainly permanent magnet materials and catalysts, accounting for 29% and 20% respectively.
Since 2021, due to the rapid increase in the acceptance of new energy vehicle products, the global penetration of new energy vehicles has increased rapidly, driving the demand for permanent magnet materials. Under the background of carbon neutralization, the increase of wind power installed capacity will also support the demand for permanent magnet materials, and the high boom of rare earth industry will continue.
Recently, MP materials signed a contract with the US Department of defense to build a commercial heavy rare earth element processing facility in Mount mantingpas. In this regard, Northeast Securities Co.Ltd(000686) analyst Zeng Zhiqin believes that as an important upstream raw material for new energy and military industry, the strategic position of rare earth is improving day by day against the background of the escalation of geopolitical situation. At the same time, rare earth is one of China’s resource products with pricing power in the world, and the industry is ushering in a historic opportunity to reconstruct the valuation system.
Citic Securities Company Limited(600030) said that the core reason for the recent strong rare earth prices is the mismatch between supply and demand. Supply side: Although the production index of rare earth in the first half of the year announced before the festival is generally in line with expectations, it is at the lower limit of expectations. At the same time, under the severe epidemic situation in Myanmar, the supply disturbance of rare earth imported ore may continue; Demand side: driven by the high-speed demand for new energy vehicles, wind power and industrial motors, the magnetic material factory has full orders, and the rare earth price is stable and high supported by the strong supply and demand fundamentals.
With the rapid growth of downstream demand for new energy vehicles, industrial motors and wind power generation, rare earth prices may operate at a high level, the industrial structure continues to be optimized, and the concentration of rare earth permanent magnet industry may be further improved Citic Securities Company Limited(600030) said that 2021 is the profit inflection point of the whole rare earth industry chain. It is expected that in 2022, the price of rare earth is expected to continue to be strongly supported by the fundamentals of supply and demand, and the profit of the industry chain may continue to exceed expectations when the volume and price rise together.
Up to now, there are more than 20 A-share rare earth related concept stocks, with a total market value of nearly 650 billion yuan.
