Magnets rare earth smelting processing volume reduction drop unprofitable

From raw material prices, the first half average price of neodymium oxide, praseodymium 301,000 / ton, down 29%, a decline of 12% dysprosium oxide 1847.4 yuan / kg, down 63 percent, a decline of 45%. Press N50 prices, the average price of 221.8 yuan in the first half Magnets / kg, down 29 percent, a decline of 14%. Based on projections, we estimate unpublished results notice other results are as follows: Baotou Steel Rare Earth, net profit fell more than 80%; Rising colored, half loss; Ningbo Yunsheng, net profit fell 50%.

Rare earth prices stabilize reason. In mid-June after a slight rebound in rare earth prices stabilize and, peers generally considered rare earth prices bottoming out of the industry pose a greater good, and the secondary market has recently experienced a wave bigger bounce. We recognize the conclusions of rare earth prices bottomed out, however, whether the industry constitutes a positive, we need to find the cause of rare earth prices rebound. Processing enterprises from the first half performance magnetics situation speculated that in the first half sales fell Magnets 10% -30%, up 20% -40%, overall still in the doldrums, can not support the upstream supply of rare earth market remains current for more than demand situation. Contrast upstream company profits, we can see that the first half of 2012 Rising colored Baotou Steel Rare Earth and sales gross profit margin was 48.75% and 14.76%, sales margin was 29.26% and 1.63%, while the first half of 2013 light rare average price fell 29 percent, the heavy rare earth price fell 63%, rare earth smelting enterprises in the profit or loss for the state, which we can conclude: Rare earth prices bottoming out from the cost of support.

As rare earth smelting enterprises already in the low-profit status, rare earth prices will support the acquisition costs, it is difficult to continue to decline, but the state of oversupply in the rare earth, rare earth prices rebound height is limited. Next longer period of time, rare earth smelting enterprises will go to production capacity in the state, is difficult to improve performance. Magnets same excess capacity, rare earth prices continue to decline no longer the case, we believe that high-margin hard magnetics processing enterprises long, strong bargaining power will gradually degenerate.


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