Rare is the time the situation improves triple bottom

From the price perspective, rare varieties of dysprosium, terbium, europium, praseodymium, neodymium has been bottoming out more than 20%, in the rare earth slid nearly 9 percent two years after the steady rise gradually. From the demand perspective, NdFeB low operating rate rose gradually from the first quarter, demand for the better was evident. From a policy perspective, Jiangxi and Guangdong Joint Strike recent illegal mining of rare earth, policy efforts to strengthen the supply side lead to contraction of the looming end of the policy. Triple Bottom urged industry rebounded.

Product prices bottomed out, expected future gains or super-rare earth prices since July 2011 high of nearly 90 percent decline has been so far, including dysprosium, terbium, europium and other varieties of heavy rare earth bigger decline this year, so the recent price first bottoming rebound, months or exceeded 4 percent (expected to double). Rare earth prices have now led the varieties from proliferation to other varieties of the potential, we believe that the dividend policy until the late fall, the future of rare earth price increases or will exceed expectations.

Downstream demand bottomed out, with exports up sharply increased prices of rare earth rational regression, in 2012 China's rare earth consumption was 89,100 tons, an increase of 7.2%, consumption growth from negative to positive, the downstream demand bottomed out. Consumption of rare earth permanent magnet in the country accounted for 42%, the largest proportion of the downstream industry demand. 2013 second quarter, NdFeB enterprises operating rate from 50% to 80%, rare earth permanent magnet industry, signs of obvious. Rare earth permanent magnet to pick up in downstream demand, driven by signs of recovery in 2013 from January to May, China's total export volume of rare earth substantial growth of 87%.

Government punch shot smuggling, the situation improves when the government is to combat illegal mining of rare earth privacy policy efforts to strengthen, is caused by the recent pick up rare earth prices bottomed major predisposing factor; same time after years of state control, the degree of concentration legitimate field of rare earth has increased dramatically, also into our legal supply of rare earth shrink year by year trend, so we think it would continue to focus on the future core of rare-earth policy against illegal rare earth and the formation of a large group, then the industry fundamentals are expected situation improves, rare earth prices will rise so full recovery, corporate earnings bottoming out.

LREE by business growth, heavy rare earth resource value to see the full restoration of rising prices, the latter or divisive, heavy rare earth prices will continue to rise to reflect the reasonable value of resources; while light rare earth in the face of global competition, prices rose limited, you need to pay more attention to their own growth, so we recommend light rare earths core growth stocks Sheng and resources, and benefit from the heavy rare earth resources revaluation Minmetals Rare Earth.

Risk Warning earth price rises less than expected risk; rare earth industry policy than-expected risk; related policy implementation is less than expected risk; rare than-expected recovery in demand downstream risks.


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