Today, influenced by supply disruptions, the rare earth metals sector is rising across the board.

As of the time of publication, 18 individual stocks in the A-share rare earth sector have hit the limit up. Earth-Panda, JL Mag Rare-Earth, Yantai Zhenghai Magnetic Material, Chengdu Galaxy Magnets have all hit the 20% up limit, Sinomag Technology rose over 18%, China Northern Rare Earth rose over 17%, Innuovo Technology, China Rareearth, Rising Nonferrous Metals Share, China Rareearth, Shenghe Resources Holding, Xiamen Tungsten, Inner Mongolia Baotou Steel Union, China Nonferrous Metal Industry's Foreign Engineering and Construction all hit the limit up.

In the Hong Kong stock market, the rare earth metals sector is also climbing, with JL Mag Rare-Earth, China Rareearth rising over 30%, and China Rareearth has accumulated a rise of over 66% so far this year.

Medium and heavy rare earths may be facing a shortage.

The mining of rare earth mines in Myanmar has been stagnant, with the border closed, and the import of rare earth raw materials from China has been blocked.

It is reported that Myanmar mainly involves medium and heavy rare earth ion ore, accounting for 11% of the global raw ore output in 2023.

Myanmar is one of the important sources of rare earth raw materials for our country. From January to September this year, China imported 0.031 million tons of rare earth oxides from Myanmar, accounting for 74.9% of the total oxide imports during the same period.

In response, Chinese rare earth industry insiders stated that they have seen some related media information. Currently, the company has its own mining operations to ensure its own needs.

China Northern Rare Earth stated that there used to be imported ore, but now the supply has decreased significantly.

As for whether it will affect the rare earth prices, Chinese rare earth industry insiders mentioned that it is not easy to answer this question.

Insiders from China Northern Rare Earth mentioned that with the decreased supply, the raw material end might be in a tight balance.

HTSC believes that the suspension of mining in Myanmar, as well as the limited supply of medium and heavy rare earths domestically due to environmental factors, may lead to a shortage in supply and demand for medium and heavy rare earths.

According to SMM research, there are still 2 months of raw material inventory in domestic smelting separation plants. If the raw material inventory is almost depleted, the prices of medium and heavy rare earths may experience a significant increase.
The supply and demand pattern of light rare earths will also improve, but domestic supply still has potential, and the shortage may be weaker than that of medium and heavy rare earths.

The industry's outlook is expected to improve.

In addition to disturbances in overseas supply, rare earth prices have been continuously fluctuating and seeking a bottom since the beginning of the year, with third-quarter prices already approaching the cost line of some high-cost mines.

Also, on October 1st, the "Rare Earth Management Regulations" were officially implemented, further controlling activities such as the extraction, production, and sales of rare earth resources.

The second batch of rare earth mining, smelting, and separation total control indicators for the year have also been issued. This year's cumulative mining and smelting indicators have increased by 5.88% and 4.16% respectively compared to the previous year, with growth rates decreasing by 15.5 and 16.6 percentage points respectively.

On the demand side, downstream sectors such as new energy vehicles and humanoid robots are expected to continue their rapid growth.

The supply-demand relationship is expected to improve, and the central price of rare earths is expected to rise.

In the latest research report, china northern rare earth stated that since August, the market has shown a warming trend, with prices of major rare earth products stabilizing and rising. Ultimately, product prices are still influenced by market supply and demand. With the self-adjustment of the rare earth market, the traditional peak season of 'Golden September and Silver October', the official implementation of the 'Rare Earth Management Regulations', the issuance of the second batch of total rare earth control indicators, the stimulation of demand from the 'trade-in for new' action in consumer goods, and the efforts of large rare earth groups in ensuring supply and stabilizing prices, it is expected that the supply and demand pattern of the rare earth market will improve, providing support for current product prices.

Furthermore, if Trump comes to power, he may first raise tariffs, increasing the importance of strategic small metals such as rare earths.

Regarding specific investments, tianfeng believes that the upstream resource symbols have gradually digested the adverse effects such as impairment, and will directly benefit from the upward trend of rare earth prices. It is recommended to focus on core companies such as china northern rare earth, china rareearth, and shenghe resources holding.

Currently, the third-quarter performance of A-shares has been fully disclosed. Among the 59 stocks in the rare earth sector, 24 stocks saw a year-on-year increase in net income in the third quarter.

Among them, earth-panda advanced magnetic material, innuovo technology, xiamen tungsten, and 17 other stocks saw a year-on-year growth of over 20%, while rising nonferrous metals share, china rareearth, and china northern rare earth, and 35 other stocks witnessed a year-on-year decline in net income.