Price recovery policies in the rare earth industry is out of the doldrums

At yesterday's meeting of the fifth "China Baotou Rare Earth Industry Forum" upload a message that China will continue to take a series of measures to promote the healthy development of rare earth industry. Rare earth prices rebound in the second half of the cases, the policy has given a positive support, rare earth industry will usher in a new opportunity for development.

Ministry Secretary Chen Yanhai raw materials, said yesterday that the first half of this year, smelting and separation of rare earth minerals and products production was 41,000 tons and 35,000 tons, plans to complete in the first half for 87% and 78%, to achieve industry profit of about 20 million. Over the past two years, China's rare earth industry management achieved positive results, but many deep-seated problems remain unresolved, illegal mining situation remains serious, with an estimated 2012 volume of rare earth minerals the country illegally have more than 40,000 tons, illegal smelting separation products There are 50,000 tons. In addition, excess capacity, a lower proportion of high-end products the problem persists, smuggling, pollution and other more serious problem in some areas.

From this point of view the company's performance during the first half of rare earth, some appalling. Minmetals Rare notice in the first half net profit dropped 95.5 percent; Xiamenwuye [-0.89% funding research report] previously announced first-half results announcement, saying that from January to June this year, attributable to shareholders of listed companies net profit of 71.1757 million yuan , down 77.69%. Affected by rare earth products continues to slump, Xiamen Tungsten Rare first half year sales price and sales volume fell sharply, leading companies affiliated Changting Jinlong Rare Earth Co., Ltd. due to operating losses and provision for inventory losses of 109 million yuan to prepare. Company said the first half of this year, the rare earth market is distorted, mainly raw materials with the product price is upside down.

Although the first half of the rare-earth prices continued to fall, but in the second half, the rare earth prices has been significantly increased. According to Orient Securities tracking data show that neodymium oxide latest price 332,500 yuan / ton, over the past month rose 29.1 percent; praseodymia 507,500 yuan per ton, nearly a month prices rose by 38.1%; ton of neodymium oxide, praseodymium price of 345,000 yuan, up 27.8 percent last month.

In the rare-earth prices rise at the same time, ushered in the rare earth industry consolidation in the industry development opportunities.

Chen Haiyan, said the coming period, China will continue to carry out special operations to combat illegal, unplanned and beyond the plan focus on combating the production, smuggling and other illegal violations against illegal enterprise, once discovered immediately ordered to stop production for rectification, and confiscated. Meanwhile, in the formation of large rare earth group speed at the same time, China will pass environmental review, environmental restoration, resource tax reform, improve industry access policy, mandatory plan to optimize production management, improve relevant laws and regulations and other measures to increase the earth behind elimination of production capacity, and further promote the industrial structure adjustment and upgrading of rare earth, rare earth industry to promote the implementation of cleaner production and healthy development.

On Wednesday, the Ministry of Public Security, the Department of Homeland eight departments jointly issued a document, the decision from 2013 August 15 to November 15 in the fight against rare earth mining, production, circulation of illegal special action.

For this special action, GF Securities analyst giant Guoxian that "implementation of the results can be expected." He said the campaign unfolded, praseodymium neodymium supply is expected to tighten significantly, because the South ionic rare earth smelting enterprises generally lanthanum, cerium, praseodymium, neodymium and other light rare earth products to take low inventory policy, there is a certain future praseodymium neodymium prices upward momentum. In the rare earth smuggling operation, the integration of large groups will enter a substantive stage, but also a positive impact on enterprises, may be concerned about Minmetals Rare Earth.

Guotai Junan Securities analyst Sang Yong Liang also believes that the metal praseodymium neodymium prices will rise 70,000 yuan / ton, the upstream companies have more than 30% gross margin. Baotou Steel Rare earth prices and sales results to the most sensitive, if the combat effect is significant, then the results will return to the Baotou Rare Earth High.


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