In the long term, the resonance between policies and emerging demands (such as Siasun Robot&Automation and the low-altitude economy) is expected to promote the upgrading of the Industry Chain towards high added value. Leading enterprises, relying on their ability to integrate resources and comply with regulations, may dominate the restructuring of the Industry.
According to the information from Zhitong Financial APP, Guoxin Securities released a research report stating that this policy highlights the status of rare earths as a strategic resource through full-chain regulation (from mining to circulation) and group integration. With "comprehensive supply control + full-process traceability" as the core, it marks the entry of China's rare earth industry into a refined governance stage. Under the resonance of rigid supply contraction and emerging demand, the strategic value of rare earth resources will continue to be prominent. In the short term, attention needs to be paid to the allocation details of indicators and the implementation of imported ore control; in the long term, policies and emerging demands (such as Siasun Robot & Automation and low-altitude economy) are likely to drive the rare earth Industry Chain to upgrade toward higher added value. Leading enterprises, utilizing their resource integration capabilities and compliance advantages, may dominate the restructuring of the industry pattern.
On February 19, 2025, China's Ministry of Industry and Information Technology released the "Interim Measures for Total Control and Management of Rare Earth Mining and Rare Earth Smelting Separation (Public Consultation Draft)" and the "Interim Measures for Information Traceability Management of Rare Earth Products (Public Consultation Draft)," which are important supporting details following the formal implementation of the "Rare Earth Management Regulations" in October 2024.
The main views from Guoxin Securities are as follows:
Supply side: Rigid constraints are strengthened, and the industry pattern is accelerated to optimize.
1. Supply contraction expectations are clear. 1) Import ore ratio: According to the US Geological Survey (USGS) 2024 report, China's imported rare earth ore accounts for 22% of global rare earth supply, with Myanmar ores accounting for 9% of global praseodymium and neodymium supply. 2) Import volume of Myanmar ores: Data from China's General Administration of Customs shows that imports of rare earth ores from Myanmar in 2024 decreased by 18% year-on-year. 3) Illegal production capacity proportion: The Ministry of Industry and Information Technology's 2023 "Interpretation of the Normative Conditions for the Rare Earth Industry" document shows that illegal rare earth production accounts for about 10% of total market supply.
2. Leading enterprises dominate consolidation. China Rare Earth Group (heavy rare earths) and China Northern Rare Earth (light rare earths) are the only two major rare earth mining groups in China, collectively controlling about 90% of the national rare earth quotas (data source: Ministry of Natural Resources "2024 National Rare Earth Mining Total Control Indicators").
Price aspect: The tight supply and demand balance supports the upward shift of the price center.
1. Short-term price fluctuations. According to data from the China Rare Earth Industry Association, the rare earth spot price index rose from 176.7 points to 181 points after the policy was released (as of February 20, 2025).
2. Medium to long-term pricing mechanisms. According to the implementation rules of the 2024 "Rare Earth Management Regulations," the Ministry of Industry and Information Technology proposed "dynamic adjustment of indicator allocation," which will comprehensively consider market demand and resource reserves.
Demand aspect: Emerging fields catalyze long-term growth logic and also force a high value-added transformation.
1. Demand for humanoid robots. According to the International Federation of Robotics (IFR) forecast, global shipments of humanoid robots may reach 5 million units by 2030, with about 3.5 kg of neodymium iron boron used per unit.
2. New energy and low-altitude economy. In 2024, China's production of new energy vehicles is expected to increase by 35% year-on-year, driving the demand for neodymium iron boron magnetic materials to grow by about 20% (data source: China Association of Automobile Manufacturers, 2024 statistical report).
Strategic significance: Strengthening resource security and international discourse power.
1. China's rare earth reserves account for 37% of the global total, with production accounting for over 60% (data source: USGS "2024 Mineral Resources Review").
2. The policy controls the entire process to reduce competition from low stock price exports. According to data from the General Administration of Customs of China, the average export price of CHINA RAREEARTH in 2024 increased by 8% year-on-year.
Today, after hitting the high near 24,000 in the early session and entering bearish positions, the index fell sharply by nearly over 600 points, immediately recouping yesterday's losses significantly.
Moreover, today it broke the new high again, reaching a maximum of 24,076, but by the end of the market, it fell back by about 70 points, producing a bearish candle. The current trend has not yet been broken, but from the previous low until now, it has risen close to 6,000 points. It is believed that those with positions can continue to hold until there is a clear trend reversal for profit-taking. Those without positions can wait for a pullback to get in. Actually, it is hoped for a quick pullback, as it allows for entry and also provides a healthy breath.
Currently, the outlook remains the same as before. It is believed that even if there is a pullback, it shouldn't be too deep. However, if Futures fail to stabilize and close below 22,350, there may still be room for decline. The chance of Futures falling below 21,400 in the short term should be low, so it is considered that if a significant pullback occurs, it presents a good opportunity to incrementally go long. Recently, there has been a consistent approach to not hold positions overnight, only focusing on immediate trades, as there is no high chasing and no casual short selling.
Comment(0)
Reason For Report