The terminal demand for rare earth magnetic materials shows a high boom. In recent years, with the development of new energy in the world and the implementation of environmental protection policies in various countries, new energy vehicles, rare earth permanent magnet motors and wind power have ushered in rapid development. The application scenario of high-performance NdFeB magnetic materials is moving from traditional consumer electronics to emerging fields. With the advancement of R & D technology and the promotion of China’s “double carbon” policy, the demand for high-end rare earth permanent magnet materials will increase significantly in the future, and the important value of rare earth magnetic materials industry will become increasingly prominent.
The production of low-end magnetic materials is surplus, and the supply of high-end magnetic materials is limited. Due to the high barriers to entry of the rare earth permanent magnet industry and the more stringent technical requirements for the production of high-performance NdFeB magnetic materials, the global NdFeB magnetic materials are in excess of low-end supply and insufficient supply of high-end magnetic materials. Low end NdFeB magnetic materials are mainly used in magnetic adsorption, magnetic separation, door buckle, toys and other fields, while high-performance NdFeB magnetic materials are used in various types of motors. At present, China’s high-performance NdFeB magnetic materials account for only about 25% of the national output of rare earth magnetic materials. Due to the high technical and financial barriers of high-performance magnetic materials, the increase of future output mainly depends on the capacity expansion of major rare earth permanent magnet leaders. With the surge of downstream demand, the gap between supply and demand of high-performance NdFeB magnetic materials will continue to widen in the future, and the development of rare earth permanent magnet industry will have a good growth and sustainability.
National policies are expected to continue to make efforts to boost the development of the industry. High performance Nd-Fe-B magnetic materials and various rare earth functional materials are high-tech new materials that the state focuses on developing. High performance NdFeB magnetic materials can be used in many fields, including new energy vehicles and auto parts, energy-saving frequency conversion air conditioning, wind power generation, 3C, energy-saving elevator, Siasun Robot&Automation Co.Ltd(300024) and intelligent manufacturing, rail transit and so on. The above-mentioned areas are the industries that the State encourages to develop, and whether the national incentive policy continues directly affects the prosperity of the industry. In recent years, the state has issued a number of policies for the upstream and downstream ends of rare earth to ensure the development of the industry. In addition, the rare earth office interviewed China’s rare earth, China Northern Rare Earth (Group) High-Tech Co.Ltd(600111) , Shenghe Resources Holding Co.Ltd(600392) and other key rare earth companies on March 3, requiring to maintain the upstream and downstream relationship of the rare earth industry chain, promote and improve the pricing mechanism of rare earth products, and jointly promote the high-quality development of the industry.
Investment strategy. The fastest growing downstream demand of rare earth permanent magnet is in the field of new energy vehicles and industrial motors. Under the condition of continuous strong downstream demand, the state is expected to increase incentive policies to boost the high-quality development of the industry. It is expected that the regulations on the administration of rare earth will be officially implemented in 2022. At that time, rare earth enterprises will develop and utilize rare earth resources in a more orderly manner, promote the price of rare earth raw materials and products to fluctuate within a reasonable range, and the return of the price of rare earth concentrate to rationality will enable magnetic material enterprises to better control production costs, which will be beneficial to magnetic material enterprises. It is suggested to pay attention to the Yantai Zhenghai Magnetic Material Co.Ltd(300224) ( Yantai Zhenghai Magnetic Material Co.Ltd(300224) ) that the export proportion of rare earth magnetic materials is the highest in the industry, focus on the development of high prosperity track businesses such as new energy vehicles and industrial motors, and continuously promote the research and development of technology; Jl Mag Rare-Earth Co.Ltd(300748) ( Jl Mag Rare-Earth Co.Ltd(300748) ) with strong guarantee of raw material supply, grain boundary infiltration technology as the core, effective control of rare earth cost and rapid development of Xinneng vehicle business; Ningbo Yunsheng Co.Ltd(600366) ( Ningbo Yunsheng Co.Ltd(600366) ) with a relatively high proportion of overseas business, leading R & D investment in the industry and actively developing new energy vehicles, consumer electronics and industrial applications.
Risk warning. Intensified industry competition, changes in national incentive policies, lower than expected demand for rare earths, risk of exchange rate fluctuations, repeated epidemics, etc.
