The downstream demand is growing rapidly
It is not only the policy level that directly benefits rare earth, but also the downstream demand side of rare earth is growing rapidly.
Rare earth is widely used in many hot industries. Rare earth permanent magnetic products can be used in new energy vehicles, wind power, consumer electronics and other fields.
I believe you all know that these industries are mentioned repeatedly by the national policy in recent years.
In yesterday’s article, the director just analyzed the market prospect of new energy vehicles with sandalwood. Then the Ministry of Commerce stressed the policy of stabilizing and expanding automobile consumption.
The main rare earth material used in new energy vehicles is neodymium iron boron, which is about 5kg for a new energy vehicle.
According to the calculation of CITIC Securities, new energy vehicles will drive the consumption of 6250 to 13700 tons of NdFeB permanent magnet materials in the next three years.
In the field of wind power, a large number of wind power enterprises are carrying out the final rush installation work because the national policy subsidies will expire at the end of the year.
According to the statistics of the Global Wind Energy Council, China’s wind power generation accounts for 35% of the world’s total, which is the largest single market in the world.
Under the core concept of reducing carbon emissions, the demand for these clean energy will inevitably continue to increase. As a key material, the prospect of rare earth is beyond doubt.
Revaluation in progress
Last year, the rare earth concept stocks headed by Jinli permanent magnet were wildly hyped.
Since then, the whole industry has basically returned to dust and soil to soil.
But now, as the country pays more and more attention to important strategic resources, the rare earth industry may really usher in a revaluation.
In fact, in recent years, China’s rare earth export has been gradually declining.
According to the data of the General Administration of customs, in 2019, China’s exports of rare earth products were 46300 tons, a year-on-year decrease of 12.64%.
In the first ten months of this year, China’s export of rare earth was further reduced to 28700 tons, a decrease of 28.4% compared with the same period last year.
After the “export control law” comes into effect, the rare earth export will be better controlled, and the downward trend of rare earth export will be formed.
Accordingly, the price of China’s rare earth export is expected to rise gradually due to the global dependence on China’s rare earth.
Among the rare earth listed companies in China, China has six rare earth groups.
The relevant listed companies and resource types of these groups are shown in the figure below.
According to the 13th five year plan of China’s rare earth industry, the six rare earth groups will complete the integration of all rare earth mining, smelting and separation enterprises in China this year.
In other words, all rare earth elements in China will be controlled by these six groups. The phenomenon of indiscriminate exploitation and waste of resources will be effectively solved, and the whole utilization and production efficiency will be improved.
At present, China’s rare earth mining is intentionally under control. The Ministry of natural resources set the total rare earth mining target at 140000 tons this year, an increase of 6.06% year-on-year.
With the gradual depletion of some rare earth ore resources, the control of mining volume may be further strengthened in the future.
As for how to invest in the listed companies under the six major groups, there are really different opinions.
According to the director, if we are really optimistic about the prospect of rare earth industry, it is better to allocate the listed companies of the six major groups on an average, which is definitely the most stable strategy.