According to Zhitong Finance APP, on February 19, the Ministry of Industry and Information Technology publicly solicited opinions on the "Interim Measures for Total Quantity Control and Management of Rare Earth Mining and Rare Earth Smelting Separation (Draft for Public Consultation)". It mentioned that the Ministry, the Ministry of Natural Resources, and the National Development and Reform Commission are responsible for the management of the total quantity control of rare earth mining and smelting separation, and they will set annual indicators for the total quantity control of rare earth mining and smelting separation. CITIC SEC stated that the demand for magnetic materials in the New Energy Fund sector driven by intelligent driving is expected to maintain rapid growth, and as the momentum in the humanoid robot and low-altitude economy sectors continues to emerge, these emerging fields are expected to become the core driving factors for long-term growth in high-performance neodymium-iron-boron demand, continuously recommending strategic allocation value in the Rare Earth Permanent Magnets Sector.

The draft points out that rare earth mining enterprises and rare earth smelting separation enterprises should be large rare earth conglomerates promoted by the state (hereinafter referred to as rare earth groups) and their affiliated rare earth mining and smelting separation enterprises. Other organizations and individuals that are not designated by the regulations are not allowed to obtain rare earth indicators. Organizations and individuals that have not obtained rare earth indicators are not allowed to carry out rare earth mining and smelting separation production activities.

Since 2024, the rapid development of emerging fields such as humanoid robots and the low-altitude economy has attracted the attention of many investors, and related stocks have continuously received funding support. Behind the rapid development of industries like humanoid robots, some potential beneficiaries have emerged, with Rare Earth Permanent Magnets being one of them.

According to Caijing Lianhe News, NVIDIA founder Jensen Huang delivered a speech at the honorary doctorate conferment ceremony of Hong Kong University of Science and Technology in 2024, emphasizing that there are three types of robots expected to achieve large-scale production in the future, namely: Autos, Drones, and humanoid robots. Among them, electric machines for robots require characteristics such as rapid response, high starting torque inertia ratio, and high motion control precision, while high-performance neodymium-iron-boron permanent magnet materials, with high reliability and stability, are ideal materials for electric machines in robots, enabling core components to be compact, lightweight, and responsive, thus having high potential to benefit from the large-scale production of robots in the future.

Specifically, Tesla released the prototype Optimus in 2022, sparking a global trend in humanoid robots. In March 2024, NVIDIA announced the humanoid robot project GR00T at the GTC conference, achieving breakthroughs in humanoid robot modeling. According to the "Humanoid Robot Industry Research Report" released at the first China Humanoid Robot Industry Conference in April 2024, the domestic humanoid robot market is expected to reach 300 billion yuan by 2035.

According to CITIC SEC's forecast, global demand for humanoid robots is expected to reach 0.025/0.738/5.94 million units in 2025/2030/2035, assuming that a single humanoid robot uses 4-6 kg of neodymium-iron-boron. Under neutral expectations, the demand for neodymium-iron-boron in the global humanoid robot sector is expected to increase to 23,760 tons by 2035, corresponding to a CAGR of 83.8% from 2023 to 2035.

In the field of Drones, the low-altitude economy is a new engine for high-quality economic growth, which was first written into the "Government Work Report" at the two sessions in March 2024; it was included in the "Resolution of the 20th National Congress of the Communist Party of China" in July of the same year; and in October of the same year, relevant ministries plan to establish a dedicated department for the low-altitude economy. Drones, eVTOLs, and helicopters are expected to become important carriers of the low-altitude economy. According to predictions from Aviation Week Network, the global delivery volume of eVTOLs is expected to reach 2,000/12,000/33,000 units in 2030/2040/2050.

According to Adamas Intelligence data, a single eVTOL typically requires about 10-20 kg of Neodymium Iron Boron, assuming a motor replacement cycle of 4 years. Under neutral expectations, global demand for Neodymium Iron Boron in the low-altitude economy is expected to increase to 9,159/10,514 tons by 2035/2040.

In terms of Autos, the trend of vehicle intelligence is prevalent, and the penetration rate of autonomous driving is expected to accelerate. Level 3 autonomous driving may begin to take effect in 2025. According to CITIC SEC's forecast, by 2030, the annual sales of vehicles with Level 3 and above autonomous driving capabilities in China will reach 20.8 million units, among which vehicles with Level 4 and above capabilities will reach 12.8 million units. It is expected that by 2030, the global production of new energy vehicles will lead to a consumption of 0.165 million tons of Neodymium Iron Boron permanent magnet materials, corresponding to a CAGR of 17.7% from 2023 to 2030.

On the supply side, Myanmar's rare earth production has grown rapidly in recent years, but the risk of over-exploitation of resources has greatly increased, making the development prospects not optimistic.

Myanmar's rare earth resources have great potential and production growth is rapid. In 2023, Myanmar has become the third largest rare earth producer globally (with a production share of 11%) and China's largest source of imports (accounting for 45% of China's rare earth mineral imports). By 2024, China’s imports of heavy rare earth minerals from Myanmar have reached 0.032 million tons, which is 1.6 times the domestic quota for heavy rare earth minerals, indicating that Myanmar's rare earth supply is particularly important for domestic heavy rare earth minerals. However, due to political instability, tighter rare earth mining policies, and inadequate infrastructure, the development environment for rare earth resources is not optimistic. After experiencing rapid production growth from 2018 to 2023, Myanmar's rare earth mining has been significantly disturbed by over-extraction, warfare, and other disruptive factors, making it quite difficult for subsequent production increases.

Moreover, the current closure of Myanmar has not ended, and the supply of rare earths from Myanmar may be lower than expected in 2025.

Due to civil war, Myanmar's imports of rare earths fell sharply to about 300 tons from October to December 2024. Although there has been a reopening since December, the difficulty of negotiation between miners and local governments has increased, and the import volume from Myanmar has still not recovered. If the disturbance prolongs, imports from Myanmar may not supplement the domestic rare earth ore supply as expected in 2025. According to estimates, under neutral expectations, imports of rare earth ore from Myanmar to China in 2025 will be about 0.024 million tons, declining by 42%/30% compared to 2023/2024, and may create strong supply constraints.

According to a recent announcement from China Northern Rare Earth, the transaction price of rare earth concentrates for the first quarter of 2025 has been adjusted to 18,618 yuan/ton excluding tax. It is noted that the associated transaction price of rare earth concentrates in the fourth quarter of 2024 was 17,782 yuan/ton excluding tax, with a month-on-month increase of 4.7%.

GTJA believes that in recent years, Myanmar's rare earth production has grown rapidly, becoming China's largest source of imports. However, constrained by political turmoil and the risk of over-exploitation of resources, supply may form strong constraints, while demand-side domestic 'Two New' policies strengthen the terminal boom cycle, and rare earth prices are expected to rise steadily, with the second phase reversal of the rare earth sector gradually starting.

Related Concept Stocks:

Jl Mag Rare-Earth (06680): Based on the establishment of a 0.04 million-ton high-performance Rare Earth Permanent Magnets production capacity by 2025, the company plans to invest in the construction of a "0.02 million-ton annual production green intelligent manufacturing project for high-performance Rare Earth Permanent Magnets" through its wholly-owned subsidiary, Jl Mag Baotou Company. The total planned investment for the project is 1.05 billion yuan, with a construction period of 2 years, using the self-owned and self-raised funds of Jl Mag Baotou Company.

CHINA RAREEARTH (00769): Previously, during an institutional survey, CHINA RAREEARTH stated that as the core listed platform of China Rare Earth Group, the company will unswervingly implement its high-quality development goals, actively align with the favorable opportunities for integration and green transformation in the Rare Earth industry, fully leverage its advantages in Rare Earth industry Operation and listed platform, and timely promote the integration and restructuring of internal and external Rare Earth Assets, making positive efforts to promote the sustained and healthy development of the Rare Earth industry.

Aluminum Corporation Of China (02600): The company is the leading enterprise in the Chinese aluminum industry and is engaged in the exploration and extraction of resources such as bauxite and Coal, production, sales, and technological research and development of alumina, primary aluminum, Aluminum Alloy, and carbon products, as well as thermal and New energy Fund power generation. The company previously stated at the Earnings Conference that as of the end of June 2023, it holds a 23.94% stake in China Rare Earth Co., Ltd. (referred to as "China Rare Earth").