Learning from history the logic behind the study of rare earth rose

Recent rare earth oxides and rare earth company stock prices rise together, as of July 16, praseodymium oxide price of 395,000 - 405,000, compared with the previous day rose 5,000 yuan, metal praseodymium price 430,000 - 440,000, compared with the day before rose 5,000 yuan; addition, since since June 28, Sheng and resources Minmetals Rare Earth rises up to 62.61%, respectively, 51.76%. However, in the case of imbalance between supply and demand fundamentals, this rally has become a bit "strange", study the fundamental reorganization seems to lie in Ganzhou Rare Earth private traders arising ore stockpile purpose of this paper is to explore the logic behind the rise.

Investment Advisor in the industry and Policy Research Center Director Hu Zhi Liang said that may have an impact on the round up of the main factors in the following aspects: First, the Baotou Rare Earth plant shutdown, although this will not affect the Baotou Rare Earth itself rare earth smelting , but will cause the market to reduce the supply of rare earth minerals; Second, the recent Ministry of Environmental Protection to increase environmental remediation efforts, although for the steel, cement and other two high-industries, but will undoubtedly reveal convey to the outside world government structural adjustment, governance pollution determination, the same as the chemical pollution of the rare earth industry inevitably will face environmental remediation risks; Third Ganzhou combat rare private mine, but reportedly Ganzhou is the MIIT against private mine the first leg of follow-up will continue in other provinces City of conduct; Fourth round down cycle has been far more than in the past, the market has increased demand;

To hammer out the basic support, this study adopted exclusion.

First look at the first factor, according to the announcement of Baotou Steel Rare Earth, one reason for the plant shutdown to comply with national totals control plan, and second, in order to control the pollution of the tailings dam, the other from the Baotou Rare Earth published financial data can be seen, since 2011, the amount of inventories Baotou Steel Rare Earth has been in a rising state in the first quarter reached 8.3 billion yuan more as much as seen in the overall market downturn and the significant improvement in the case of Baotou Steel Rare Earth reason With the pollution and digest some inventory. Of course, the plant shutdown will inevitably affect the supply of rare earth oxides, causing a certain degree of market volatility.

Let's look at the second factor, the Baotou Rare Earth concentrator One reason is to cut pollution, and Ganzhou Rare Earth private mining against a certain extent, this also implies the meaning, but the current state of the rare earth industry, the overall ideas of governance is still is integrated to enhance the right to speak, and compared to the iron and steel, cement and other big polluters, the rare earth industry pollution to light many, at least for now the signs are so exposed. Therefore, in overall funding, energy limited circumstances, on the rare earth industry to carry out environmental remediation big move less likely.

Let's look at the third factor, Ganzhou Rare Earth Rare Earth is not the first time against private mines, and the country is also not the first time against private mine, but every combat effectiveness of private mines are not significant. The reason is that the private mine is more like a combat sport specific, difficult to sustain, and lower private investment in mining, mostly in the deep forests of them, even the unprecedented crackdown and took a landfill pit spot Feng Ting equipment and various other practices, however, if the lack of an effective mechanism for the resurgence of private mines may still exist.

Furthermore, even if the Baotou Rare Earth plant shutdown, or even all the rare earth mine were completely destroyed private to current inventory levels Baotou Steel Rare Earth, the overall rare earth production, fully meet the needs of the downstream market downturn. By process of elimination, we can conclude that caused skyrocketing rare earth round the root cause lies in the aforementioned fourth factor, that is, the market itself has increased demand, and we have demonstrated the aforementioned upper and lower ends are not fundamental, therefore, the fourth factor mainly reflected in the end, that is, smelting links, trade links.

If you only consider the supply and demand ends, the two are matched, but in the middle of smelting, trade distorting aspects of the entire market supply and demand. First, from the smelting sectors, despite a certain state regulations smelting separation indicators, but the integration process in order to get more big right to speak, has the resources to enter midstream smelting enterprises to accelerate the separation of the field, no resources, accelerate the expansion of smelting enterprises separation capacity, resulting in separation of smelting capacity far beyond the rare earth mining index. Therefore, part of the non-resource smelting enterprises in order to ensure adequate separation of the market, they are bound to turn to private mine fields. This is against private Ganzhou Rare Earth Mining in the entire supply base to produce such a large impact.

From the point of view of traders, far more than the previous down cycle, has let them overly sensitive to market an urgent need to ease up their frayed nerves, it can be said is they round stockpile extrinsic nerves reaction.

Thus, together, round up like firewood met Agni, with three east, and finally evolved from a spark to start a prairie fire, but in the case of a solid foundation, the fire will eventually prompt was extinguished.


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