The hottest rare earth industry is expected to sta

The rare earth industry is expected to stabilize and rebound

the latest monthly prosperity index of the China economy nonferrous metals industry shows that in December 2016, the prosperity index of the China economy nonferrous metals industry was 31.1, up 1.3 points from the previous month, breaking through the upper edge of the "cold" region and rising to the "normal" region; The leading index of China economy nonferrous metals industry was 86.3, up 1.7 points from the previous month; The consensus index was 79.7, up 1.1 points from the previous month. The prosperity index shows that the prosperity index of the non-ferrous metal industry has rebounded to the "normal" region, but the pattern of continuous recovery of the industry operation still needs to be further consolidated. In 2016, the operation of China's rare earth industry was generally weaker than the monthly prosperity index of the nonferrous metal industry of China Economic and Technological Commission. It mainly presents the following basic characteristics

the structural reform on the supply side of rare earth has achieved success

oversupply and overcapacity are the bottleneck factors restricting the development of the rare earth industry, and they are also one of the important reasons why the rare earth price PHA composed of two or more monomers has attracted a lot of attention in recent years. During the "12th Five Year Plan" period, relevant state departments and industrial enterprises targeted the implementation of structural reform on the supply side of rare earth through the following measures, and achieved results: first, eliminate low-end backward production capacity, and reduce the rare earth smelting and separation capacity from 400000 tons/year to 300000 tons/year; Second, we will continue to implement the management of total mining volume control indicators and total production volume control plans, while strengthening the management of mining rights, and further standardize the order of rare earth mineral resources development; Third, by carrying out special actions such as environmental protection verification and supervision, we will improve the cleaner production level of the rare earth industry, and some enterprises that fail to meet the environmental protection standards will gradually withdraw from the market; Fourth, the self-discipline of the industry was further strengthened. Some enterprises took the initiative to take measures to reduce (stop) production according to market demand and control the pace of shipment, which improved market expectations to a certain extent. On the whole, in 2016, the structural reform on the supply side of rare earth made positive progress, the output of products decreased, and the relationship between supply and demand was repaired, which laid the foundation for the stabilization and recovery of the rare earth industry in 2017

import and export trade continued to grow significantly

the two-way substantial growth of import and export trade is a major feature of the operation of China's rare earth industry in 2016. Customs statistics show that from January to November 2016, China imported 15500 tons of rare earth smelting and separation products, with a year-on-year increase of 52.0%, and exported 42100 tons of smelting and separation products, with a year-on-year increase of 40.9%. The situation of import and export "double prosperity due to the strain gauge pasted on the surface of elastic components" shows that: first, the diversified supply pattern of global rare earth has been formed, the overseas rare earth smelting and separation industry has developed rapidly, and the competitiveness of rare earth salts, oxides and other primary products has gradually emerged; Second, the recovery of overseas rare earth application links is obvious, which brings pressure to China's rare earth deep processing industry. In the future, China's rare earth industry will more fully participate in market competition and international division of labor. The export of rare earth functional materials continued to maintain a steady and rapid growth. In the first 11 months, 24400 tons of rare earth permanent magnets were exported, with a year-on-year increase of 16.9%

the prices of major rare earth products stabilized at a low level

in 2016, under the joint action of market factors and industrial policies, the prices of rare earth products throughout the year showed a low and volatile pattern. In the first quarter of 2016, most smelting separation enterprises stopped production for maintenance, and the market transaction was light; In the second quarter of 2016, especially in the first ten days of April 2016, the commercial reserve was officially launched, which boosted market confidence, and the prices of major rare earth products began to rise; In the third quarter of 2016, the downstream demand continued to be depressed, and the rare earth market entered the downward channel; In the fourth quarter of 2016, the low price of rare earth stabilized. According to our analysis, the main reasons are the following two aspects: first, affected by environmental protection supervision, exhaustion of indicators and other factors, some enterprises began to stop production, leading to a tightening of supply; Second, cost support, rare earth prices continue to decline in space is very limited; Third, the downstream production enterprises began to replenish their inventories. In addition, the State Reserve news continued to ferment, and the market was reluctant to sell. Since late November 2016, the low price of rare earth has stabilized, and there has been a rebound momentum

the prices of rare earth oxides and metals in 2016 were lower than those of the previous year. From the perspective of representative rare earth products, the average prices of neodymium oxide, dysprosium oxide and terbium oxide in 2016 were 256000 yuan/ton, 1247000 yuan/ton and 265000 yuan/ton respectively, with a year-on-year decrease of 4.4%, 16.7% and 15.2% respectively; The price of lanthanum oxide, cerium oxide, yttrium oxide and other surplus rare earth elements fell by 5% - 30%. Affected by the replacement of LED phosphors, the volume and price of domestic three primary color phosphors have fallen together, and the change of downstream consumption structure has also led to a significant year-on-year decline in the price of europium oxide, with a price drop of 64% for the whole year. The continuously depressed market has brought great operating pressure to rare earth enterprises. In the first three quarters of 2016, the operating revenue of rare earth listed companies such as northern rare earth, Minmetals Nonferrous Metals and Guangsheng nonferrous metals decreased to varying degrees year-on-year, and the net profit of some companies belonging to the parent company fell significantly year-on-year

the formation of the leading pattern of large groups in the rare earth industry

the formation of large rare earth groups, improving the industry concentration, and improving the overall competitiveness of China's rare earth industry through marketization is the main theme of China's rare earth industry management system at present. Since the issuance of several opinions of the State Council on promoting the sustainable and healthy development of the rare earth industry (GF [2011] No. 12), the integration subjects of major rare earth groups have actively carried out integration through wholly-owned acquisitions, equity participation and holding, and the establishment of platform companies. From October 2015 to December 2016, the formation of major groups of Aluminum Corporation of China, Xiamen tungsten industry, North rare earth, south rare earth, Guangdong rare earth and Minmetals has passed the acceptance, So far, the development pattern dominated by large groups in China's rare earth industry has been officially established. The six major rare earth groups have integrated 22 of the 23 rare earth mines in the country and 54 of the 59 smelting and separation enterprises, reversing the long-standing situation of "many, small and scattered" in the rare earth industry, and further enhancing resource control and market influence. In the medium and long term, the six rare earth clusters will further take assets as the link, give full play to their advantages in capital, technology and management, and jointly promote the standardized development of China's rare earth industry

the standardization of the industry order continues to increase

the standardization of the industry operation order is not high enough, which is one of the important reasons for the continuous pressure operation of China's rare earth industry. In recent years, relevant state departments have expelled "bad money" and supported "good money" by formulating industry norms, carrying out joint and special actions, and major rare earth resource areas have achieved phased results by building mining protection facilities and improving the mining supervision system. In particular, in December 2016, the Ministry of industry and information technology issued the letter on the request of business to organize and carry out special actions to combat violations of rare earth laws and regulations (Gong Xin Ting Lian Yuan Han [2016] No. 764), and held a rare earth order rectification work arrangement meeting, which further unified the understanding and made it clear that this special action is an "upgraded version" of the previous special action, with greater strength and operability, mainly focusing on illegal mining and smelting separation, Disguised processing in the name of "comprehensive utilization" and low-cost export of rare earth products. A total of 379 enterprises were included in the verification list, especially rare earth trading enterprises and resource comprehensive utilization enterprises, which achieved full coverage in the scope of verification. The implementation of this special action will further standardize the operation order of China's rare earth industry, reduce the impact of the black (gray) industrial chain on the formal market, and further improve the effective supply level of the rare earth industry

2017 rare earth industry 3. Research and judgment on the development of adjustment closed-loop parameters

from the supply side, in 2017, China will continue to implement the total production control plan and the management of total mining control indicators, and the production pattern of local mineral products and smelting separation products will not change greatly, and will remain stable as a whole. With the in-depth promotion of the "special action to crack down on rare earth violations", the operation order of the industry, especially the order of rare earth supply, will be further improved

from the demand side, in China, the performance of traditional fields is relatively weak, industries such as trichrome phosphors have shrunk significantly, and emerging fields have developed rapidly, especially the rapid development of new energy vehicles, providing a new growth point for the downstream consumption of rare earth; Internationally, from the export situation from 2015 to 2016, the demand release of foreign rare earth market is relatively obvious. It is expected that the export volume will remain high in 2017, but the growth rate will slow down; On the whole, the demand for rare earth will continue to grow steadily in 2017

from the perspective of market operation, after several years of continuous decline, the current rare earth price has fallen back to the level around 2010, basically at the historic bottom, and enterprises are under great operating pressure. With the further enhancement of the market influence of the six rare earth groups, the further standardization of industry order, and the further recovery of bulk commodity prices, it is preliminarily expected that the rare earth market is expected to stabilize and recover in 2017