In 2021, the market volatility, rare earth industry stock trend is particularly bright. In the same period, when the Shanghai stock index rose only 1.36%, Shenghe resources, a rare earth head company, rose as much as 200%, and its share price reached a record high.
In the past, rare earth experienced two rounds of sharp rise in October 2016 and may 2019, mainly due to the tight supply of rare earth at the policy end. What is different from the past is that this round of rare earth market is mainly due to the tight supply and demand, and the improvement of demand side also plays a certain role.
Supply side: export scale reduction + industrial standard rectification
From the supply side, the reasons for the rise of rare earth are mainly the reduction of export scale and the rectification of industrial norms.
Analysts pointed out that the reduction of China's export of rare earth, coupled with the notice issued at the end of last year to strengthen the rectification of the rare earth industry and the implementation of total index management, helped to boost the rise of rare earth prices from the supply side.
According to the data released by customs, China's exports of rare earth in 2020 will be 35448 tons, down 23% from 2019. The increase in China's rare earth prices has also been boosted by concerns that future supply of rare earth will tighten, and buyers at home and abroad are stepping up "hoarding".
In addition, on March 1, xiaoyaqing, Minister of industry and information technology, said, "we have not sold the price of rare earth at present, and the price of" soil "has been sold. This is a vicious competition, which makes the precious resources waste by competing against the price
Xiao Yaqing's direct words have revealed the hidden disease of China's rare earth industry: no pricing right. China has more than 80% of the reserves of rare earth in the world, which has absolute monopoly status, but it has been developed in disorder and dumped to the world at the price of cabbage. At present, the solution is to carry out the rectification and integration of the industry in addition to the industry legislation.
In terms of legislation, on the morning of March 1, Xiao Yaqing answered media questions on the regulations on rare earth management (Draft for comments) drafted by the Ministry of industry and information technology. In response, CITIC Securities believes that the national policy supports, industry legislation helps price growth, and rare earth industry faces historic turning point.
In terms of industry integration, in order to rectify and standardize the disordered competition in rare earth industry, the state began to build a large group of rare earth, and finally formed the current "5 + 1" North-South six rare earth patterns. Among them, "1" refers to the rare earth in the north, and the key integration is the rare earth resources and enterprises in Inner Mongolia and Gansu. "5" refers to aluminum China, Xiamen tungsten, China five mines, Guangdong rare earth and south rare earth. The key integration is rare earth resources and enterprises in Jiangxi, Hunan, Guangdong, Fujian, Yunnan, Guangxi, Jiangsu, Shandong, Sichuan and other places.
Demand side: continuous emission of new energy vehicle demand
From the demand side, the main reason is the continuous demand emission of new energy vehicles.
Recently, chenshihua, Deputy Secretary General of the China Automobile Association, pointed out that China's automobile market has great potential, and it is expected that the sales of new energy vehicles in China will reach 1.8 million this year. According to the data of the former China Automobile Association, the production and sales of new energy vehicles in China in 2020 are 1366000 and 1367000 respectively, with a year-on-year growth of 7.5% and 10.9%, all of which have reached a record high. According to 2020 data, the sales volume of new energy vehicles in China is expected to grow by 31.68% this year.
In terms of high performance permanent magnet materials, according to the data of antatec, the global demand for high-performance permanent magnet materials in 2018 mainly focuses on vehicles (50%), wind power (10%) and frequency conversion air conditioning (9%); in the automotive field, traditional vehicles account for 38%, and new energy vehicles account for 12%. It is necessary to point out that the consumption of NdFeB per vehicle is about 3.5kg / vehicle. As a contrast, the consumption of single vehicle of traditional fuel vehicles is about 0.5kg / vehicle. The content of rare earth in new energy vehicles is far higher than that of traditional fuel vehicles. With the increasing proportion of new energy vehicles in the future, the demand for rare earth will continue to burst.
In addition, with the deepening of carbon neutralization policy, clean and low carbon, safe and efficient energy system is constantly improved, and the growth rate of the main application industries downstream of wind power, frequency conversion air conditioning and other rare earth will also continue to rise. It is estimated that the demand of NdFeB will increase by about 10% in 2021, while that of high-performance NdFeB will be about 20%.
Shenghe resource benefit market trend
Shenghe resources is the most beneficial enterprise in this round of rare earth market. It is the only rare earth listed company with strategic layout at home and abroad. The company has business involved in light and heavy rare earth plates. Over the years, the company has actively distributed the whole industry chain of rare earth through investment and acquisition, involving the upstream raw ore mining and selection, smelting separation in the middle reaches and downstream processing and application.
As China's mines mainly operate according to the production and operation indicators, the total mining index of Shenghe resources has reached 13300 tons of rare earth oxides, accounting for 10% of the country. Overseas, the mining resources are not affected by the domestic mining quota, so Shenghe resources have good growth.
In 2016, Leshan Sheng, a subsidiary of Shenghe resources holding company, became the single largest shareholder of Greenland company by subscribing to Greenland company to issue new shares, with the current shareholding ratio of 11.04%. Greenland is an Australian listed company with its main business including exploration and exploitation of mining assets, headquartered in Perth, Western Australia. The project of Greenland has a mineral reserve of 108million tons, which is the world's top rare earth mine. In may2017, Shenghe resources obtained 9.99% of mpmo's preferred equity and obtained the right to distribute and underwrite the products. Mpmo owns the monthepas rare earth mine in the United States, which is one of the best rare earth mines in the world. Shenghe resources' overseas minerals are expected to receive 40000 tons of REO per year. In addition, Shenghe resources also owns 90% of the equity of Vietnam rare earth Co., Ltd., which mainly engages in the processing of rare earth raw materials.
Affected by rare earth prices, Shenghe resources performance may usher in an outbreak. In 2020, Shenghe resources is expected to be 250-300 million yuan of net profit attributable to the shareholders of listed companies, an increase of 148 million yuan to 198million yuan over the same period of last year, with an increase of 146% to 195% year on year. The main reason for the company's advance increase in performance is due to the non recurring profit and loss events such as incentive shares of RMB 260million after MP listing in this period, and the net profit attributable to shareholders of listed companies is about 180million yuan. After deducting non recurring profit and loss, the company's performance is expected to increase by 18 million yuan to 68million yuan, up 35% to 133% year on year. It is worth mentioning that the securities companies unanimously expect the net profit of the company to be RMB 787.7 billion in 2021, with a year-on-year growth of 213%.
At present, the listed companies involved in the upstream of rare earth include northern rare earth, Baogang Co., Ltd., Xiamen tungsten industry, five minerals rare earth and Guangsheng nonferrous metals, among which northern rare earth, five minerals rare earth and Guangsheng nonferrous metals also rose more than 50% this year.
The state starts to unify control and control
Although the rare earth market is visible to the naked eye, but the price fluctuation has caused confusion in the industry.
At present, there are many disadvantages in the industry chain of rare earth in China, such as low integration, decentralization and low utilization rate of resources. After monopolizing the market, China rare earth not only did not raise the price, but began to compete in the rare earth industry. The vicious internal competition destroyed the market price and made the precious strategic resources sell the price of the earth.
The result is that China's reserves of rare earth are declining, while Japan, on the other hand, has hoarded Chinese rare earth, which has been used for hundreds of years. Meanwhile, the mining and refining of rare earth is accompanied by high pollution. The chaotic rare earth industry has been doing loss business.
But in recent years, the state has attached great importance to the serious loss of rare earth resources and carried out strong control. The main control means for rare earth are limited mining volume and export restriction, and the resource tax is imposed on related rare earth products. The export of rare earth enterprises is no longer determined by themselves, but by the state quota. Relevant enterprises need to control the export volume according to the national standards.
The relevant regulations have been in practice for several years, and the dependence of international market on China's rare earth has also been reduced, and the loss of rare earth resources in China has been controlled. Japan, which has been importing cheap rare earth in China, began to seek other rare earth producers after protesting that it had no fruit, and invested in the exploitation of rare earth resources; while the United States, which closed its own rare earth mines importing rare earth from China, reopened domestic mines for self-use.