Rare earth prices continued lower demand recovery yet

Lately, in the face of rare earth market downturn this year, the grim situation, the domestic rare earth industry is brewing a new round of "cut-price", China's largest rare earth production companies have taken the lead from the Baotou Rare Earth July 1 onwards will cut half belongs to rare plant . Last year, the Baotou Rare Earth three times issued "stop price" announcement. Other rare earth companies such as Minmetals, Chinalco and Xiamenwuye to follow its production. In the whole industry, "cut price" a month later, some rare earth appears broad stock market, where prices rose neodymium praseodymium oxide, 20% reached 450,000 yuan per ton. But after a brief rise in rare earth prices will return to the down channel. Ultimately, the 2012 average price of rare earth fell about 40% over the previous year.

In addition, following last year's third quarter gross domestic campaign to crackdown on illegal rare earth supply chain special rectification activities, China's major producing areas for rare earth potential illegal acts to increase the crackdown. Haitong Securities, said the amount of private mining junk in the past two years has been the normal quota of 4 to 5 times. And after the Spring Festival this year, Ganzhou, Guangdong crackdown against the smuggling problem starts, compared to the past economic sanctions, now mostly involved in criminal level, when the industry chain upstream profits reunification, private mining impulse reduced, which is the recent rare earth prices began to rapidly picked up the core reason.

"Triads" and purchasing and storage significantly interfere with short-term supply and demand in the domestic rare earth industry is conducive to rare earth prices rise, but Minsheng Securities also believes that the current recovery of rare earth industry chain downstream demand is lower than expected, making the rare earth prices rebound fatigue, at the same time, persistence and efforts to combat illegal mining of lower than expected.

For downstream demand, Haitong Securities through research that compared to last year, most of the current downstream operating rate recovered to Qi Cheng levels, mainly due to cars, air conditioners and electronics, the downstream demand in coming months as a whole more stable.

Its short term, South Lido square rare earth companies, medium-term policy efforts still need to observe and effects, if the recent introduction of new remediation activities, rare earth prices are expected to continue to rebound, where the heavy rare earth companies benefit from a larger, long-term trends in the rare earth industry still needs observe the policy coherence and implementation efforts.


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