Rare earth prices stabilize prices rebounded again find the equilibrium point

Since mid-June, the domestic prices of light and heavy rare earth oxide stabilized rebound, which is the main varieties of light rare earth oxide, praseodymium, neodymium oxide prices rose more than 10 percent, and the upward trend is accelerating; aspects of heavy rare earth oxide, dysprosium price from mid-June the 1255 yuan / kg up to 1475 yuan / kg, up more than 17%, terbium oxide by the 2550 yuan / kg up to 2950 yuan / kg, up more than 15%. Determine the price of rare earth in our previous fourth quarter last year into the bottom area, this decline has narrowed since the earth, but continued to show a downward trend in mid-May this year, the heavy rare earth prices bottomed out in mid-June to late light rare earth prices also bottoming out, we believe that light and heavy rare earth prices have bottomed out after rare-earth prices marked up to two years of adjustment, we began to look for a new price equilibrium.

Since the current round of price adjustment of rare earth in July 2011 began in May this year has been more than two years, the main varieties of rare earth prices fell more than 80% of rare earth enterprises overseas three consecutive quarters at a loss, we believe that long-term rare earth prices lower than the cost of doing business overseas line is not sustainable. With midstream and downstream businesses restocking, rare earth exports pick up, the gradual recovery of the industry, rare earth prices gradually stabilized rebound.

Overseas production release is limited, rare earth prices rebounded sustainable

From Molycorp2013 in Q1 quarterly perspective, the Q1 quarterly real rare earth oxide production and sales of only 763 tons, according to the current production, we expect this year's total output of 5,000 tons, lower than our expectations, and a row The third-quarter loss. Based on our overseas production of rare earth observation business operating costs, the current rare earth prices have been lower than the cost of overseas enterprises wire. Has been put into operation at current Molycorp's MountainPass the costs, the average cost of production of its REO at 40 U.S. dollars / kg, which has multiple consecutive quarterly loss. We believe that rare earth prices is difficult to maintain long-term cost of doing business in the overseas rare earth line, round rare earth prices rebound relationship is a true reflection of market supply and demand, prices have sustainability.

Of course, we must also see that the declining cost of overseas rare earth mine huge space, if its capacity is fully put into operation, the unit REO expected cash costs will be significantly decreased, and the impact of existing rare earth market.

NdFeB performance greater flexibility, benefit significantly

As we judge this round of rare earth prices are only promote market supply and demand, not an industry policy to promote, so we think the demand for rare earth downstream recovery is more uncertain, especially NdFeB industry, the economy rebounded. In addition, rare earth prices rose sharply with the previous different that the rare earth prices are expected to rise steadily, and the rate of increase of 30% to 40%, prices of rare earth upstream firm's profit contribution is more limited, and NdFeB enterprises due to its relatively strong pricing power, performance, greater flexibility than the upstream, to benefit significantly. Therefore, the current round of rare earth prices rebound, we focus on the positive: a) the heavy rare earth enterprises, including: Rising colored, Minmetals Rare Earth and Xiamen Tungsten; 2) NdFeB enterprises, including: Zhong Ke San Huan, Ningbo Yunsheng and n Sea materials.


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