In the short term, due to high supply concentration and expectations of demand improvement, rare earth prices can still maintain a tendency for slight strength. In the medium to long term, even in the event of oversupply, the prices can be relatively controlled, and the far future supply and demand for rare earths are expected to transition from surplus to tight balance.
Futu Securities released a research report, noting in the short term that the annual growth rate of indicators in 2024 is expected to slow compared to the previous year. The Myanmar mine has a production cut due to cost and war, and terminal demands from home appliances and electric vehicles continue to improve. Throughout the year, the excess supply will be reduced, but due to high supply concentration and expectations of demand improvement, rare earth prices can still maintain a tendency for slight strength. In the medium to long term, uncertainties will increase in overseas supply, and the growth rate of domestic indicators is expected to continue to slow. New energy demand and humanoid robots will subsequently drive demand growth, while the 'old for new' policy is expected to bring both incremental and stock demand. As the most centralized supply of non-ferrous varieties, even if there is an oversupply, the prices can be relatively controlled, and the far future supply and demand for rare earths are expected to transition from surplus to tight balance.
Imported rare earth minerals: There are expectations of a decrease in output of Myanmar and American mines. 1) Myanmar mine: Myanmar mine imports for May were 4,400 tons of REO, +10.5% YoY but -8.6% MoM. From January to May, accumulated import of Myanmar mines was 19,400 tons of REO, +2.5% YoY. As a result of long-term unregulated mining and the impact of war, Myanmar mine supply is expected to gradually decrease. 2) American mines: Imports of American mines for May were 3,200 tons of REO, +7.7% YoY and +19.0% MoM. From January to May, accumulated import of American mines was 13,200 tons of REO, -21.7% YoY/-0.37 tons of REO. The MP has started to separate and smelt its own mines, and imports of American mines are expected to gradually decrease.
Oxides: Overall oxide production remained stable. 1) Praseodymium-neodymium oxide: production in May was 7,976 tons, +26.2% YoY and +1.6% MoM. Accumulated production from January to May was 39,000 tons, +23.9% YoY/+7,544 tons REO. Some separation enterprises in Jiangxi stopped production due to environmental issues. 2) Dysprosium oxide: production in May was 306 tons, +47.1% YoY and +2.3% MoM. Accumulated production from January to May was 1,486 tons, +52.3% YoY/+510 tons REO. 3) Terbium oxide: production in May was 54 tons, +42.1% YoY and +3.8% MoM. Accumulated production from January to May was 262 tons, +47.2% YoY/+84 tons REO.
Metals: Overall metal production remained stable in May. 1) Praseodymium-neodymium metal: production in May was 7,050 tons, +48.3% YoY and +4.2% MoM. Accumulated production from January to May was 32,700 tons, +31.1% YoY/+78,000 tons REO. 2) Dysprosium-iron: production in May was 220 tons, unchanged MoM but +56.0% YoY. Accumulated production from January to May was 880 tons, +25.5% YoY/+179 tons. 3) Terbium metal: production in May was 31 tons, +29.2% YoY and +10.7% MoM. Accumulated production from January to May was 141 tons, +25.3% YoY/+29 tons REO.
Magnetic materials: The foundry for magnetic materials was stable in May. NdFeB blank production in May was 27,100 tons, +41.6% YoY and +1.9% MoM. Accumulated production from January to May was 127,400 tons, +34.8% YoY/+32,900 tons REO. Due to fierce competition downstream, purchases are more prudent. Exports of the four kinds of magnetic materials totaled 7,100 tons, +4.9% YoY but -1.0% MoM. Total accumulated exports from January to May were 33,400 tons, -1.6% YoY/-544 tons REO.
Due to inventory, the supply-demand relationship for Praseodymium and Neodymium still remained oversupplied: 1) Light rare earths: From the perspectives of metal and oxide, there was a shortage of 299 tons of Praseodymium-neodymium oxide in May, but due to the impact of inventory structures, the actual supply-demand relationship remained oversupplied and accumulated oversupply from January to May was 763 tons. 2) Heavy rare earths: Terbium was oversupplied by 8 tons in May, and from January to May, it was oversupplied by 41 tons; Dysprosium was oversupplied by 76 tons in April, and from January to May, it was oversupplied by 534 tons.
Related symbols: current rare earth prices and stocks are both at a double bottom. It is recommended to pay attention to China Northern Rare Earth (600111.SH), China Rareearth (000831.SZ), and jl mag rare-earth (300748.SZ).
Risk warning: downstream demand may underperform.