Recently, the domestic light rare earth market prices have risen. On April 16th, the Shengyi Society Rare Earth Index was 685 points, an increase of 18 points from the 11th, a decrease of 31.98% from the highest point of 1007 points during the cycle (2022-02-24), and an increase of 152.77% from the lowest point of 271 points on September 13th, 2015.
| Gamma-PGA (gamma polyglutamic acid) |
Domestic prices of neodymium oxide, metallic neodymium, praseodymium oxide, metallic praseodymium, praseodymium neodymium alloy, and praseodymium neodymium oxide have all shown an upward trend. As of the 17th, the price of neodymium oxide was 845000 yuan/ton, with a price increase of 3.68% this week; The price of neodymium metal is 1.05 million yuan/ton, with a price increase of 5.0% this week; The price of praseodymium oxide is 835000 yuan/ton, with a 4.05% increase this week; The price of praseodymium metal is 1.045 million yuan/ton, with a price trend of 6.63% this week; The price of praseodymium neodymium alloy is 985000 yuan/ton, with a price increase of 5.35% this week; The price of praseodymium neodymium oxide is 812500 yuan/ton, with a 2.20% increase this week.
Recently, the domestic light rare earth market prices have risen, with core product prices continuing to rise, and the market atmosphere rapidly warming up. The core is the resonance of four major events: the sharp rise in concentrate costs triggering a full chain price adjustment, the depletion of spot inventory, the concentration of essential demand replenishment, and the tightening of supply expectations.
1、 Direct factor: Significant increase in concentrate prices
Baosteel Group and Northern Rare Earth have raised their concentrate prices to 38804 yuan/ton in the second quarter, an increase of 11970 yuan/ton month on month, marking the seventh consecutive quarter of price increases. After the pricing reform, the largest single quarter increase broke the expectation of “slow rise”, and traders and separation factories collectively held back on sales, resulting in a sharp decrease in spot circulation and an increase in the market price of light rare earths.
2、 Spot end: inventory bottoming out, no stock available for sale
The inventory of the entire industry chain is at a historical low, far below the 3-4 month safety line, and low-priced spot goods have basically disappeared. The orders for new energy vehicles and wind power have rebounded, and magnetic material factories have resumed work to replenish inventory. Coupled with overseas panic stocking, it is difficult to find a single item, which has pushed up the prices of rare earths in four markets.
3、 Supply side: rigid locking, expected to be tighter
Domestic quotas are strictly controlled, with a mining quota of 285000 tons by 2026. The growth rate of light rare earths has been suppressed to within 6%, the lowest in recent years, and the supply is inelastic. In addition, the sharp decline in imports from Myanmar has resulted in a month on month decrease of over 40% in port arrivals, insufficient replacement and supplementation of medium and heavy rare earths, and an expanding gap in light rare earths. As a result, the domestic market for light rare earths has risen.
4、 Demand side: Centralized release of new energy essential needs
The sales of new energy vehicles have increased, and the penetration rate of permanent magnet motors is over 95%, making it necessary to replenish the inventory in a centralized manner. Global new installed capacity has increased by 40%, with a surge in offshore megawatt wind turbines and orders scheduled for the second half of the year. Recently, European and American manufacturers have increased their stocking due to supply chain uncertainty, leading to a widening price difference between domestic and international markets and a surge in export orders.
In the short term, the rare earth market is prone to rise but difficult to fall, with a focus on maintaining high levels. With the gradual recovery of demand in downstream fields such as new energy vehicles, wind power installation, and industrial motors, coupled with the continuous tightening of rare earth industry control, the expectation of strategic storage, and the recovery of overseas high-end manufacturing demand, the supply and demand pattern of rare earths is expected to tighten again. At the same time, rare earths, as the core raw materials of high-tech industries, remain unchanged in the long-term demand growth logic under the background of carbon neutrality and high-end manufacturing upgrading, and the rare earth market is expected to strengthen in a long-term trend.
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