Rare earth is known as “modern industrial vitamin” because of its wide range of terminal applications. Rare earth is the collective name of 17 metal chemical elements. It is usually divided into light rare earth and medium heavy rare earth. Rare earth usually exists in the form of rare earth ore in nature. After separation and smelting, rare earth ore can be further processed into various rare earth materials. Therefore, from the perspective of the links where rare earths are located, the rare earth industry chain can be divided into three parts: the mining and smelting separation of rare earth resources in the upstream, the intensive processing of various rare earth materials in the midstream, and the downstream terminal application field;
China has a full process rare earth processing industry chain, which is independent and controllable on the rare earth supply side, and occupies a leading position in the global rare earth market. In 2020, China’s rare earth reserves equivalent to 44 million tons of rare earth oxides, accounting for 38.0% of the global reserves. It is a real large country with rare earth resources reserves; China has a whole industrial chain from rare earth mining to smelting separation and intensive processing. In the upstream link, the output of rare earth products is as high as 140000 tons, accounting for 58.3% of the total global output. Rare earth is an important strategic material. The annual rare earth mining and smelting separation indicators issued by the Ministry of industry and information technology and the Ministry of nature strictly control the output of rare earth from the source and maintain the price and scarcity of rare earth; The establishment of “China rare earth group” marks that China is more mature in the implementation of rare earth indicators and the control of rare earth prices, and China’s rare earth industry will have a higher voice in the world;
“Double carbon” will further promote the downstream demand for high-performance NdFeB, and the terminal demand will rise to stimulate the potential of magnetic materials. Rare earth permanent magnet material is the rare earth material with the most development potential in the intensive processing link in the middle reaches of the rare earth industry chain. At present, the third generation rare earth permanent magnet material – NdFeB permanent magnet material has the best comprehensive quality and a wide range of terminal applications. Among them, as a strategic emerging material proposed by the state, high-performance Nd-Fe-B permanent magnet is widely used in high-speed growth downstream fields such as new energy vehicles, wind power generation and energy-saving household appliances due to its high magnetic energy product and intrinsic coercivity. Relevant production enterprises are expected to enjoy the dividends of the new energy industry, and the future performance will be accelerated with the gradual implementation of the production expansion plan of each enterprise. As the downstream demand increases year by year, we predict that by 2025, China’s demand for high-performance NdFeB will reach about 100000 tons, China’s high-performance NdFeB will remain in short supply in the next few years, and the profitability of the existing rare earth permanent magnet processing enterprises is expected to be further improved;
Investment suggestion: with its unique resource reserves, industrial integration at the source, continuous optimization of the pattern of rare earth permanent magnet materials industry and continuous and vigorous demand for new energy at the terminal, China’s rare earth industry chain has achieved full autonomy, and its global competitiveness has given the country a precious trump card at the level of resource strategy. With the steady progress of China’s energy reform process and the acceleration of the integration of rare earth industrial chain, the track that can realize industrial autonomy will rise with the high growth rate of terminal demand to a greater extent, and the enterprises that can gain a firm foothold in the industrial chain with various competitive advantages will enjoy the maximum track growth dividend. It is suggested to pay attention to China Northern Rare Earth (Group) High-Tech Co.Ltd(600111) , China Minmetals Rare Earth Co.Ltd(000831) , Shenghe Resources Holding Co.Ltd(600392) , Rising Nonferrous Metals Share Co.Ltd(600259) and Xiamen Tungsten Co.Ltd(600549) ; It is suggested to pay attention to high-performance Nd-Fe-B production enterprises Jl Mag Rare-Earth Co.Ltd(300748) , Beijing Zhong Ke San Huan High-Tech Co.Ltd(000970) , Yantai Zhenghai Magnetic Material Co.Ltd(300224) , Ningbo Yunsheng Co.Ltd(600366) , Earth-Panda Advanced Magnetic Material Co.Ltd(688077) and Innuovo Technology Co.Ltd(000795) ; It is suggested to pay attention to Jiangsu Huahong Technology Co.Ltd(002645) .
Risk tip: risk of large fluctuation in the price of upstream rare earth products; The rare earth mining and separation smelting indicators issued by the Ministry of industry and information technology deviated significantly from the expected limit; The progress of raising funds for high-performance Nd-Fe-B production enterprises is less than expected; The risk of the impact of the epidemic on downstream demand.
