The rare earth sector exploded again in the intraday market on the 26th. As of press release, Jiuwu Hi-Tech and Galaxy Magnets surged more than 17%, while Inviton, Guangsheng Nonferrous, and Inlova had risen and stopped, while Shenghe Resources, Yunhai Metal, and Shengxin Lithium Energy had risen by more than 8%.

According to business society data, as of November 25, prices of products such as praseodymium alloys, praseodymium oxide, and neodymium oxide among light rare earth products in China have risen sharply. Among them, the price of praseodymium alloy is 1,025,000 yuan/ton, which has broken through the 1 million yuan per ton mark, a monthly increase of nearly 20%.

In addition, the price of neodymium oxide was 840,000 yuan/ton, a sharp increase of 17.07% this month; the price of neodymium oxide was 855,000 yuan/ton, an increase of 16.33% this month; and the price of praseodymium oxide was 865,000 yuan/ton, an increase of 13.07% this month.

Domestic prices of medium to heavy rare earths have also risen. As of November 25, the price of dysprosium oxide was 2.945 million yuan/ton, an increase of 3.51% this month; the price of ferrocyanide alloy was 2.91 million yuan/ton, an increase of 2.46% this month; and the price of dysprosium metal was 3.78 million yuan/ton, an increase of 4.13% this month.

CITIC Securities pointed out that recently, downstream rare earth replenishment is being actively carried out, major national policies are gradually getting closer, supply, demand, and policy support are expected to resonate. As the global rare earth resource value revaluation is carried out, it continues to recommend strategic allocation opportunities for the entire rare earth industry chain.

Since October, emerging downstream demand for new energy vehicles, wind power, and industrial robots has continued to improve, while demand for traditional automobiles, energy-saving inverter air conditioners, and 3C has been progressing steadily.

According to data from the China Association of Automobile Manufacturers, production and sales of new energy vehicles in January-September were 216.0/2.143 million units respectively, an increase of about 2 times over the previous year. New energy vehicles use about 3-5 kg of NdFeB per bicycle. Assuming that the global production of new energy vehicles will reach 23 million units in 2025, the corresponding demand for NdFeB will reach 70,000 tons. The average annual growth rate of NdFeB demand in the NEV industry from 2021-2025 may exceed 35%, and new energy vehicles may become the largest downstream application of rare earths in 2025.

In addition, downstream demand in the wind power sector is also in full swing. It is estimated that in 2025, the new installed capacity of offshore and land wind power will reach 130 GW. Currently, the global penetration rate of permanent magnet direct drive fans is 30%. Assuming an increase of 1 percentage point each year, based on an estimate of 700 tons of NdFeB per GW permanent magnet direct drive motor, the wind power sector will consume 33,000 tons of NdFeB in 2025, and the long-term demand space for rare earths has been fully opened.

The agency said that as demand for new energy vehicles continues to explode, downstream demand for carbon-neutral wind power, energy-saving inverter air conditioners, etc. is progressing steadily, downstream demand for rare earths is expected to continue to improve; it is expected that during the “14th Five-Year Plan” period, domestic rare earth supply will still be limited by total mining volume indicators, and supply-side high-pressure policies such as blackmail and environmental protection will continue. Overseas supply growth will be relatively limited in the next 5 years, and global rare earth supply and demand may be in a tight balance for a long time. It is expected that rare earth prices may progress steadily in 2022, and the profits of companies related to the rare earth industry chain are expected to continue to grow over a long period of time. It is continuously recommended to focus on the strategic allocation value of the entire rare earth industry chain.