MIIT Rare Deal or re-turning the tide to encourage downstream applications

2011 price spike of rare earth industry to suffer, the downstream industry has been no pressure of cross God. In order to solve the problem of rare earth industry sluggish downstream demand, zhengbao informed that the Ministry is preparing to promote the application of rare earth downstream market policies to reverse the current decline of rare earth industry.

Rare is called "industrial MSG", which has applications in many emerging industries. The industry believes that China's rare earth reserves and production of the world's leading, and promote China's rare earth downstream applications is an important part of the New Deal.

Policy: the promotion of downstream applications

Shanghai and Shenzhen stock markets yesterday, the rare earth sector led the broader market once again, sparked speculation that policy is expected. There are rumors that the heavy rare earths policy is brewing. Shanghai Securities News reporter learned through the industry, relevant departments are studying the policy of promoting the rare earth downstream applications.

July 14, China Rare Earth Industry Association in the Chinese Academy of Engineering organized the overall development and application of rare earth resources strategic planning workshops, rare earth Association Gan Yong and academicians participants.

Ministry director Jia Yinsong RE office at the meeting analyzed the main problems of the industry and preparedness measures. China Rare Earth Industry Association Deputy Secretary-General Chen Zhanheng reported "rare earth resources and the application of the overall strategic development plan" outline drafted situation.

Back in December 2012, a specification like the same theme was held in Beijing. Attended by a number of academicians and experts have proposed to the rational use of rare earth resources, adjust rare earth resources strategy, the rationalization of costs and prices of rare earth; increase rare earth technology innovation, expanding the application of rare earth products, such as smart phones, home appliances and so on. The meeting held that the application of rare earth development might lead and produce an industrial revolution. In addition, the meeting also mentioned the problem of integrating a large Rare Earth Group, to strengthen environmental governance work.

Reason: skyrocketing strength hurt downstream

Rare promote downstream applications become urgent work. 2011, with the introduction of a number of national RE Deal, rare earth prices as a wild horse straight up, raw material prices have rocketed so unbearable downstream to find a few alternatives, some companies hesitate to return to the era of low-ferrite, 2012 year, rare earth downstream application vendors once only twelve percent of the operating rate, stop the closure of a few. The second quarter of this year, although the application of rare earth terminal capacity utilization improved to Friday 60% but then shadow enable enterprises still dominated by low inventory strategy.

The amount of 70% of the world's rare earth application in China. Many industry experts believe that the dramatic changes in the price of rare earth severe blow to the development of downstream industries, a large number of alternative technologies enable new applications of rare earth died, and even lead to technical regress.

Injuries eventually spread upstream downstream applications. After preliminary continued price cuts this year, in April and May, rare earth prices have fallen back to the level before accelerating prices - the highest price is only 80%, while a large number of rare earth piled in the warehouse can not find a buyer.

Promote the development of downstream applications where the rare earth industry to become one of the key.

Impact: second half performance or enhance

As downstream applications operating rate is not high, the first half of this year, the rare earth-related poor performance of listed companies.

Case in Baotou Rare Earth. Its first quarter net profit of 245,262,900 yuan, down 79.68%. Minmetals Rare expects first half net profit of about 900-1500 yuan, down 92.50% -95.50%. Leading enterprise application providers downstream Zhong Ke San Huan half profit 138 million yuan -2.30 billion yuan, down 50% -70%.

However, since the end of June, Jiangxi Ganzhou Rare Earth to carry out illegal production of remediation and the Ministry intends to rectify in the country "black earth" after the news, rare earth prices began to rise to 20% or so, Baotou Steel Rare-earth upstream manufacturers and Minmetals Rare performance is expected to improve.

Once the "overall development of rare earth resources and the application of strategic planning," released during the year, the survival of the environment or the entire industry is expected to reverse. Rare earth magnetic field of new materials represented strong growth in recent years, especially in the electronics industry NdFeB rare earth permanent magnet materials to Zhong Ke San Huan, Ningbo Yunsheng, represented by rare earth deep-processing enterprises will benefit.


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