From June 4 to 5, the National Development and Reform Commission held three consecutive meetings on rare earth industry. The participants of the meeting are industry experts, rare earth enterprises and competent authorities of origin. The main issues involved are rare earth environmental protection, rare earth black industry chain, rare earth intensive and high-end development, etc. For an industry, such intensive actions and gestures are rare.
Industry insiders believe that the rare earth industry will have further policy impetus. A series of policies, such as environmental protection inspection, index verification and strategic storage, will be issued intensively to promote the realization of a rational industrial structure of rare earth, advanced science and technology, effective protection of resources, orderly production and operation of the industry development pattern, and to give full play to the special value of rare earth as a strategic resource.
Environmental protection will become an important grasp in rectification
On January 4, 2019, the Ministry of Industry and Information Technology and other 12 ministries and commissions issued the Notice on Continuous Strengthening the Order Rectification of Rare Earth Industry. For the first time, a multi-sectoral joint supervision mechanism has been established, and special supervision has been carried out once a year to hold accountable for violations of laws and regulations, which means that rare earth rectification has formally entered the normalization.
At the same time, the circular will further clarify the requirements of rare earth groups and intermediary organizations, and how to guide the high-quality development of the industry, which will have a far-reaching impact on the sustainable and healthy development of the rare earth industry.
Industry insiders said that the rare earth industry is a seriously polluted industry, in the process of mining and processing will lead to serious soil erosion, destruction of surface plants, soil pollution, acidification and other environmental problems. Since 2017, environmental protection supervision has been carried out, and many rare earth enterprises that fail to meet the environmental protection standards have been shut down and punished, which has greatly deterred the industry and promoted the price rise of rare earth. Therefore, environmental protection inspection will be an important means for the country to rectify rare earth.
Du Shuaibing, senior rare earth analyst at Baichuan Information, said that under the current development situation, there would be further policy impetus for the rare earth industry.
The reorganization of rare earth industry has been carried out every year since 2010. Rare earth consolidation has also been upgraded year by year, mainly to crack down on the black rare earth industry chain.
The rare earth consolidation in 2017 is a sign that the industry consolidation is going to be substantive and normalized. In this year, the rare earth consolidation tends to be normalized and institutionalized. Guotai Junan believed that the rectification took longer and was more professional. The scope of the rectification was greatly expanded and it involved six major rare earth groups for the first time. A group of experts was set up for the first time by means of comprehensive taxation, technical inspection and other means to assist the rectification.
Less than 40% of rare earth storage tasks have been completed.
Rare earth storage is also a countrys heavy weapon. There are two forms of rare earth storage, one is national reserve (national reserve), the other is enterprise (commercial) reserve (commercial reserve).
China officially launched rare earth storage (national storage) on July 31, 2014, with a total storage capacity of 10090 tons. At the end of 2016, the State Reserve Bureau announced the successful number of rare earth storage bids. Among them, in 2016, all 9 kinds of rare earth National Reserve tenders were carried out. After several rounds of storage, the National Reserve of Rare Earth has won a total of 6004 tons of the bid, corresponding to its planned storage target of 15.5 million tons, less than 40%. The reason why the State Reserve has repeatedly sold out is that the storage price is lower than the market price.
Data Source: Baichuan Information
In March 2014, the WTO published the report of the Expert Group on the Export Management Measures of Rare Earth, Tungsten and Molybdenum Related Products of the United States, the European Union, Japan v. China, ruling that the export management measures of the products in question were illegal. This means that China will abolish rare earth export quotas and tariffs.
In order to avoid the serious impact of black rare earth on the legitimate rare earth market and lead to the cabbage price of rare earth into the international market, the domestic management policy for the rare earth industry has also been adjusted quickly.
These policies include: cracking down on illegal and illegal rare earth, promoting the integration and formation of large rare earth groups, transforming the 1+3 pattern into 1+5 pattern, controlling the main mining body from the source, classifying and managing light and heavy rare earth, giving full play to the market role of production mandatory plan, establishing rare earth storage system, promulgating Regulations on the Management of Rare Metals.
Commercial reserves are collected by six major rare earth groups and given to the state free of charge. In 2016, after three times of commercial storage, the total amount has reached 5200 tons.
Data Source: Baichuan Information
Rare earth market started in the expectation of storage. The rising trend of light and heavy rare earth prices is an important signal for the start of the rare earth plate. The market ends with the completion of storage or the price of rare earth products drops. During this period, the whole market is not unilateral upward, it can be roughly divided into four stages:
First, the anticipated stage of storage: mainly due to the catalysis of the anticipated storage, the rare earth plate has risen rapidly and the rare earth mineral products have risen slightly.
Secondly, in the phase of callback, the rare earth plate declined because the storage progress was lower than expected or the price of rare earth products rose less or even declined.
3. Storage stage: Storage lasts for about one month, 2010-2011 lasts for about five months, and the rare earth plate rises rapidly with the rise of the price of rare earth products;
4. Completion stage of storage: After the completion of storage, the price of rare earth products and rare earth plate almost simultaneously declined. If the price of rare earth products rebounded in the follow-up, the rare earth plate also rebounded synchronously.
Photo Source: New Materials Online
Rare earth prices are expected to be supported in the future
On June 3, Southern Rare Earth Group announced the list of rare earth mining and smelting separation enterprises (the first batch in 2019).
According to the announcement, there are 60 rare earth mining enterprises affiliated to Southern Rare Earth Group, of which, except for the normal production of two light rare earth mines in Mianning County, the remaining two light rare earth mines in Mianning County, and 56 medium and heavy rare earth mines in Jiangxi Province are still in production suspension. In addition, the first batch of rare earth control targets this year were 60,000 tons, down 18% from the same period last year.
Industry insiders said that due to restrictions on imports of heavy rare earth ores from Myanmar and related news, heavy rare earth has increased considerably. It is expected that the continued shutdown of heavy rare earth ores in South China will further increase the supply and demand gap of heavy rare earth ores in China and support the price of products.
A Survey of Key Rare Earth Enterprises in China
Photo Source: New Materials Online
At present, the price of rare earth market is on the upward trend. According to Baichuan information data, the latest quotation of praseodymium oxide and neodymium oxide is 345-355,000 yuan/ton on June 5, the latest quotation of dysprosium oxide is 197-202,000 yuan/ton, and the latest quotation of terbium oxide is 380-350,000 yuan/ton.
Du Shuaibing said that the main factor for the collective increase of rare earth main varieties is the adjustment of supply and demand pattern, especially for heavy rare earth products. Affected by the closure of Myanmar, the resources of rare earth minerals began to be tense gradually in June. Most manufacturers said that they could not find the source of goods and there were no other alternative products. Later, they would gradually reduce or stop production, resulting in a sharp decline in heavy rare earth production and stable demand side performance. The downstream can also accept the price of dysprosium and terbium when they are purchased according to the order. In this context, heavy rare earth prices are expected to rise in the future.
Recently, the variety of Terbium and dysprosium has increased considerably. Du Shuaibing said that Terbium and dysprosium elements in high-end magnetic materials account for a very low proportion, its price factor should not be the main consideration, the stability of supply is the key. On the premise of stable supply, price rises are acceptable and beneficial to both upstream and downstream, which can promote the healthy and stable development of the whole rare earth industry and form a virtuous circle.
Source: China Securities News. Adding Responsible Editor for Source Name Compatibility: Shi Jianlei_NBJ11331