On November 2, Caixin learned (Reporter Wang Bin) At the beginning of November, due to disturbances in the supply of rare earth elements from Myanmar, the rare earth sector once again attracted market attention. At the same time, after the rare earth product listing prices 'hanging high' in September and October, China Northern Rare Earth (600111.SH) slightly raised the listing price in November.

Caixin reporters learned from the industry that the reduction in the supply of rare earth elements from Myanmar has a significant impact on domestic medium and heavy rare earth elements. Currently, the mining in Myanmar is still at a standstill, and it is expected that the impact of this event will continue for some time. For the future market, industry insiders believe that the rare earth industry is expected to begin recovering.

Myanmar's rare earth mine is still in a state of suspension, and the difficulty of resuming supply within the year is significant.

Myanmar is the third largest rare earth ore producer in the world and an important source of rare earth raw materials for China. According to data from the General Administration of Customs, 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.

The supply disturbance of rare earth elements from Myanmar, combined with the formal implementation of the Rare Earth Management Regulations on October 1, has compressed the supply. Recently, many institutions have expressed optimism about the future market, igniting the market in the rare earth sector. In the secondary market, on October 31, A-share market stocks such as China Northern Rare Earth and China Rareearth (000831.SZ) hit the limit up, while the rare earth sector in the Hong Kong stock market surged simultaneously.

Futubull Information rare earth analyst Wei Kaili told Caixin reporters, "The mine in Myanmar is currently in a state of suspended mining operations. Myanmar mainly produces medium to heavy rare earth ore, so the prices of medium and heavy rare earth elements currently have some support."

"The rare earth industry entered a downward cycle in 2022, and is currently in the bottom range, showing signs of stabilization and recovery. Market sentiment is also gathering. Any movements in the market will have a significant impact on the rare earth industry, mainly due to the release of market expectations," said a person related to China Northern Rare Earth to Caixin reporters.

Regarding whether this event will affect the rare earth prices, the above-mentioned China Northern Rare Earth relevant personnel stated that the import volume of rare earths from Myanmar accounts for a large proportion of the domestic rare earth import volume. It is expected that the impact of this event will last for a period of time. "The reduction in the supply of rare earths from Myanmar has a significant impact on domestic medium and heavy rare earths, with the Baiyun Obo Mine's medium and heavy rare earth content accounting for about 2%. The company also has some medium and heavy rare earth products in production and sales."

On the other hand, China Rare Earth personnel told reporters from Caixin that "we cannot predict the extent and duration of the impact of this event. We have our own mines, which are currently being mined, to ensure a stable supply of raw materials for downstream enterprises. The rare earth industry is quite clearly controlled by indicators, and we have always been producing according to indicators. Moreover, internal indicators within the group can be adjusted, which is not a challenge for us."

A research report released by HTSC on October 31st stated that the suspension of mines in Myanmar and the restricted supply of domestic medium and heavy rare earths due to environmental reasons may lead to a shortage of medium and heavy rare earths. "We believe that the escalation of the situation has a significant impact on mine labor, water and electricity, making it difficult to resume supply within the year, but it is necessary to pay attention to the progress of the situation."

Sources from SMM told Caixin reporters that, according to their research, domestic smelters still have a 2-month inventory of raw materials. Institutional analysis believes that if raw material inventories are almost depleted, prices of medium and heavy rare earths may experience a significant increase; the supply of light rare earths will also improve, but there is still potential for domestic supply, and the scarcity level may be weaker than that of medium and heavy rare earths.

"Golden September and Silver October" opened high and closed low, with the China Northern Rare Earth listing price experiencing a "triple increase."

On November 1st, China Rare Earth announced the listing prices for rare earth products in November, which have been raised for three consecutive months. However, Caixin reporters noted that compared to September and October, the month-on-month increase in November's listing prices has significantly decreased, with the price increases for multiple rare earth products being only 0.19%.

SMM data shows that on the day when China Northern Rare Earth announced the listing prices for November, the mainstream transaction price of praseodymium-neodymium oxide in the spot market ranged between 0.422 million yuan per ton, while the market price for praseodymium-neodymium metal ranged between -0.525 million yuan per ton, both slightly higher than the November listing prices of China Northern Rare Earth. However, SMM also mentioned that there is currently a strong wait-and-see sentiment in the market.

The aforementioned personnel from China Northern Rare Earth told reporters that the company's listing price follows an internal pricing mechanism, combined with market conditions, to guide the reasonable operation of rare earth prices and ensure the stability of industry supply and demand. "Sometimes high prices can result in no market, so the listing price mainly aims to maintain the stability of rare earth prices."

"Although the listing price in November increased slightly, the market reaction was not significant and did not provide actual stimulus. In addition, downstream order performance was poor, and most companies are not bullish about the future market," said Wei Kaili to reporters.

Financial Associated Press reporters noted that this year's 'Golden September and Silver October' market opened high but ended lower, falling short of market expectations in the second half. The month-on-month increase in the listing price of China Northern Rare Earth in November narrowed, which may be related to this.

In Wei Kaili's view, this year's performance during the peak season of 'Silver October' was more subdued. "The earlier rise in ore prices provided some support to the upstream market, but did not transmit to the downstream magnetic materials sector. Overall, the level of inquiries and quotes was relatively low, and the transaction situation fell short of expectations. In fact, the outlook remains weak."

Li Congming told Financial Associated Press reporters that the capacity utilization rate of magnetic material companies decreased month-on-month in October, mainly due to lower long-term prices in the fourth quarter. Companies reluctantly had to reduce production rates to maintain performance. In previous years, the rare earth prices tended to weaken in the fourth quarter, but now overall prices are relatively low with little room for further decline. In the future, rare earth prices are expected to fluctuate narrowly.

However, the above-mentioned person from China Northern Rare Earth told reporters that the recent market demand is relatively stable, and there is an improvement in orders from downstream magnetic material factories. 'Our upstream rare earth raw material end has always been running at full capacity, and currently the operating rate of magnetic material companies is around 80%. The company's third-quarter performance saw a narrowing year-on-year decline and an upward trend in monthly recovery, mainly due to the increase in rare earth product sales and significant support from product prices.'

China Rare Earth stated at a recent performance briefing that in 2024, due to factors such as market environment and industry cycles, the prices of major rare earth products are expected to decline rapidly in the first quarter, fluctuate at relatively low levels in the second and third quarters, and experience some rebound in the fourth quarter. With the formal implementation of the "Rare Earth Management Regulations" and the improvement in the supply-demand landscape, prices of major rare earth products are expected to return to a relatively reasonable range.