According to the Commodity Analysis System of Business Society, the price trend of the domestic rare earth market declined in the first half of 2023. From the rare earth industry price index chart, it can be seen that the rare earth index at the beginning of the year was 664, and on June 30, it was 454. The overall decline was 210 points, and the rare earth market significantly decreased. The trend of the rare earth industry price index in the first half of 2023 is as follows:
In the first half of 2023, the price trend of the domestic light rare earth market significantly decreased. The price of neodymium oxide at the beginning of the year was 770000 yuan/ton, and the market price at the middle of the year was 477500 yuan/ton, with a price drop of 37.99% in the half year; The price of neodymium metal at the beginning of the year was 952500 yuan/ton, and the mid year market price was 602500 yuan/ton, with a decrease of 36.75% in half a year; The price of praseodymium neodymium oxide at the beginning of the year was 710000 yuan/ton, and the mid year market price was 450000 yuan/ton, with a six-month decline of 36.62%; The price of praseodymium neodymium alloy at the beginning of the year was 865000 yuan/ton, and the mid year market price was 560000 yuan/ton, with a half year decline of 35.26%; The price of praseodymium oxide at the beginning of the year was 695000 yuan/ton, and the mid year market price was 477500 yuan/ton, with a half year decline of 31.29%; The price of metal praseodymium at the beginning of the year was 915000 yuan/ton, and the mid year market price was 627500 yuan/ton, with a half year decline of 31.42%. The trends of each product are as follows:
In the first half of 2023, the market price of heavy rare earth will decline. According to statistics, the market price of Dysprosium(III) oxide in China at the beginning of the year will be 2.5 million yuan/ton, and that in the middle of the year will be 2.225 million yuan/ton, with a decline of 11% in the half year; The price of dysprosium metal at the beginning of the year was 3.21 million yuan/ton, while the mid year price was 2.71 million yuan/ton, with a half year decline of 15.58%; The price of dysprosium iron alloy at the beginning of the year was 2.485 million yuan/ton, and the market price at the end of the year was 2.095 million yuan/ton, with a six-month decline of 15.69%. The specific trend is as follows:
From the rare earth trend chart, it can be seen that the domestic rare earth market has experienced a significant decline in light rare earth, while the heavy rare earth market has experienced a relatively small decline. In the first half of the year, the rare earth market experienced a significant decline from January to April, followed by a rebound in market prices in May and a return to decline in June.
From the beginning of the year to the end of April, due to the scarcity of inquiries from downstream metal and magnetic material enterprises, downstream manufacturers mainly consumed existing inventory, and the actual transaction price of rare earth continued to shift downward. The prices of rare earth metals and oxides also fell, and the situation of raw material cost inversion in metal factories is still difficult to alleviate in the short term. Some metal factories have reduced their production burden. In addition, downstream user demand is weak, rare earth manufacturers continue to release production capacity, and some traders are bearish on the market. Despite the continuous insufficient consumption capacity of downstream buyers, market confidence remains sluggish, and the wait-and-see sentiment of rare earth practitioners further intensifies. Finally, the import of rare earth raw materials increased significantly, while the market trading volume was relatively low. The operating rate of the separation plant hit a new low, and multiple negative factors combined, accelerating the decline in rare earth prices.
In May, the promotion of automobiles has achieved significant results, with an increase in inquiries. Due to the long decline in light rare earth prices in the early stage, the prices quoted by the holders have been relatively firm, resulting in an increase in actual transaction prices. Recently, market inquiries and quotations have been relatively active. As inventory has been depleted, trading volume has increased. However, downstream demand has grown slowly, market information is still weak, and the increase in orders from metal factories is not significant. The wait-and-see sentiment in the rare earth market still exists, making it difficult for subsequent demand to follow up in the long term.
In June, the domestic rare earth market returned to a downward trend, and inquiries for praseodymium neodymium products were relatively scarce. Transactions were mainly in demand, with some companies experiencing a decline in price support. In addition, insufficient demand support led to a decline in the domestic rare earth market trend. In June, the price of metal praseodymium and neodymium remained inverted, mainly to ensure the supply of long-term orders. Intermediaries were cautious in replenishing small quantities, resulting in limited transactions. Recently, both rare earth production and market inventory have decreased. The supply of raw materials is tight, and there are few spot goods in the market. Sellers are cautious in their quotations, and the transaction situation is weak. Downstream procurement is mainly based on demand, and the prices of rare earth products are generally fluctuating and decreasing.
Supply side: In 2023, the first batch of rare earth mining, smelting and separation total control indicators issued by the Ministry of Industry and Information Technology and the Ministry of Natural Resources were 120000 tons and 115000 tons, respectively. Among them, the total amount of light rare earth mining is 109057 tons, an increase of 22.1% compared to the first batch in 2022; The total index of medium and heavy rare earth mining is 10943 tons, a decrease of 4.7% compared to the first batch in 2022. From this, it can be seen that the index of light rare earth mining continues to increase, while the index of heavy rare earth mining has slightly decreased, resulting in a greater decline in the young rare earth market in the first half. After years of governance, the domestic rare earth industry has gradually formed a supply pattern with large groups as the main body and relatively concentrated raw materials. With the continuous development of the foreign rare earth industry, the share of China’s rare earth production has decreased from 90% to 70%. The development of the foreign rare earth industry is detrimental to the domestic rare earth market prices.
Import and export: From January to May 2023, China’s cumulative total import of rare earths was 73033 tons, a year-on-year increase of 31.9%; From January to May 2023, China’s cumulative total export of rare earths was 20987 tons, a year-on-year decrease of 4.4%. The export volume of rare earths in China has decreased, and the demand for rare earths has decreased. The import and export statistics of rare earth products from January to May 2023 are as follows:
Demand side: The continuous development of the new energy industry has provided certain support for the domestic rare earth industry. Due to the introduction of car purchase promotion measures and marketing activities in multiple regions, the production and sales speed of new energy vehicles has increased. In May, the production and sales of new energy vehicles completed 713000 and 717000 units respectively, with a year-on-year increase of 53% and 60.2%, and a market share of 30.1%. From January to May, the production and sales of new energy vehicles completed 3.05 million and 2.94 million units respectively, with year-on-year growth of 45.1% and 46.8%, and a market share of 27.7%. Recently, the country has accelerated the construction of charging infrastructure to better support the entry of new energy vehicles into rural areas, which is conducive to unleashing the consumption potential of rural areas and increasing the sales of new energy vehicles. Although the automotive market has grown, the rare earth market still faces significant pressure, with a serious supply-demand contradiction. In the first half of the year, the price trend of the rare earth market has declined.
Future Forecast: Although the downstream rare earth industries such as automobiles and wind power have developed well in the first half of the year, it is difficult to boost the confidence of the rare earth market. The main reason is that magnetic material companies mainly consume raw material inventory and have relatively small procurement volume. The overall decline in the rare earth market in the first half of the year is mainly due to the decline. The recent global economic situation is not optimistic, and China’s exports have been subject to certain restrictions. In addition to the continuous development of foreign rare earth industries, there is still significant downward pressure on rare earth prices in the short term. In the third quarter, rare earth prices may still be mainly subject to weak adjustments, and the fourth quarter will enter the peak season of the rare earth industry, with some growth in production and sales. In addition, with the continuous high-speed development of new energy, new materials, energy conservation and environmental protection industries, there is still a gap in domestic rare earth demand, The development prospects of the rare earth industry are still broad, and the rare earth market may experience an upward trend in the fourth quarter.
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