Rare is expected situation improves soon Shouchu

After years of state governance, the degree of concentration legitimate field of rare earth has been significantly improved , China's supply of rare earth have become legitimate 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 expected situation improves , rare earth prices will rise so full recovery , corporate earnings will bottom out .

1 . Introduction

Magnetic material is very versatile and functional materials steeped in history , its basic component is made of iron , cobalt , nickel, three kinds of ferromagnetic elements. As early as 3000 years ago , the ancient Chinese invented it out with a magnet ; while modern life, magnetic materials are used in many fields, such as motors, transformers, memory, etc. . Permanent magnetic materials and soft by nature into two categories , the former mainly ferrite and rare earth alloys , which are mainly soft ferrite materials.

In recent years , the global production of magnetic materials as well as relying on electronic technology and the rapid development of environmental technology drastic growth. 2006 to 2012 , the global production of permanent magnetic materials and soft magnetic materials at a CAGR of 9% and 19%. The Chinese production of magnetic materials has been ranked first in the world . 2012 , China's output of about 600,000 tons permanent magnet materials , accounting for 75% of the global market capacity ; production of soft magnetic materials is about 370,000 tons , accounting for about 70% of the global market capacity . With the new materials "Twelfth Five-Year Plan " in the magnetic material to give development planning, as well as the state will vigorously support emerging industries such as policy background, combined with the current low-carbon and green economy, sustainable development , magnetic materials industry structure will appear sexual adjust and take off the whole industry chain linkage .

2 . Permanent magnet materials opportunities and challenges

2.1 Introduction
permanent magnet materials
Magnetic materials , also known as hard magnetic material , is a broad hysteresis loop , high coercivity , high remanence , once the magnetization is able to maintain a constant magnetic material . Permanent magnet materials can be divided into : ① alloy permanent magnet materials, including rare earth permanent magnet materials , SmCo, alnico ; ② ferrite permanent magnet material . Including rare earth permanent magnet materials and can be divided into: the first generation of permanent magnets ( SmCo 1:5 type alloy ) , the second generation of permanent magnets ( 2:17 samarium -cobalt alloy ) , and the third generation of rare earth permanent magnet alloy ( NdFeB alloy ) . As science and technology updates faster and faster replacement , permanent magnet materials applications as performance is being improved constantly expanding .

2.2 energy saving spawned increased demand for rare earth permanent magnet materials

With the " Kyoto Protocol" entry into force , the world of increasing environmental awareness , coupled with China is accelerating the pace of construction of a conservation -oriented society , resulting in the demand for rare earth permanent magnet materials will become very strong , according to the Chinese Society of Rare Earths forecasts, 2015 world's rare earth demand will reach 21 million tons, average annual growth rate will reach more than 8% . And in the rare earth permanent magnet materials most noteworthy is NdFeB magnetic materials . As excellent magnetic NdFeB and known as " Magneto " and is widely used for new energy vehicles , energy-saving elevator , wind motor , inverter air conditioner , EPS, mobile phones and other fields, but will face even greater opportunities.

2.4 Ferrite supply and demand would stabilize

Permanent ferrite magnets with uniaxial anisotropy is a hexagonal structure of the compounds . Ferrite magnet having a homosexual and heterosexual magnetism of the points, according to the production process can be divided into sintered ferrite magnet and bonded ferrite . Ferrite material in the outside world after the disappearance of the magnetizing field , still retains a strong long time constant remanence properties , can be used to generate the external space Steady magnetic field.

The application areas of permanent ferrite mainly concentrated in the low-end markets, such as FB4 products rarely applied in the high-end market , but as a substitute for NdFeB magnets , the future market capacity there is much room for improvement . According to the Ministry of Information Industry forecasts based on data show that in 2012 China's demand for permanent ferrite is 741,200 tons , is expected to 2015 , China's various industries for permanent ferrite total demand will reach 86.45 tons , the annual compound growth rate of 24%.

Ferrite stage downstream demand more for the automotive industry, computing and industry, toy industry , household appliances and electro-acoustic industry , and with the Chinese auto industry to thrive in recent years , the rapid development of the computer industry and the state of the appliance under Township policy subsidies and other favorable factors have stimulated the demand for permanent ferrite rapidly expanding . So the next few years , the domestic market of the magnetics are good prospects .

The supply side , the current permanent ferrite main producing countries including China , the United States and Japan . But as environmental awareness and environmental needs of the expansion and the production costs increase, production began declining in developed countries and is mainly concentrated in the high-end products. While the production of low-end permanent ferrite body has shifted to China . 2005 production of ferrite is 35 million tons, accounting for about 50% of global production ; 2012 permanent ferrite worldwide production of about 980,000 tons , while China's output of 65 million tons, and the expected future two years of hard ferrite yield compound annual growth rate will reach 13 %, the overall growth in a stable range.

At present, China 's production capacity of the industry is still very low concentration , the top five companies in the market share of only about 30%. Most companies also are in the small scale production of small case . Magnetic materials and devices according to the National Industry Association released information indicating that China's current number of permanent ferrite is about more than 200 enterprises , of which 1,000 tons annual output of 75% ; 1,000-3,000 tons annual output of enterprises accounted for 15 percent ; production in the 3,000-5,000 tons of the total number of firms in the industry for 7% of the number of enterprises ; annual production capacity of more than ten thousand tons level only a few companies , accounting for about 3% of the total .

In such circumstances, permanent ferrite industry will usher in a good season. Shift from a fully competitive industry is monopolistic competition , industry concentration will be improved. By then , mergers, expansion, new will become a trend in the industry . Therefore, we believe ferrite overall industry will enter a stage of industry consolidation . Although China's annual production is consistent with the annual demand , but because of the demand for downstream enterprises is gradually increased, and growing faster than the supply rate , plus expensive NdFeB permanent ferrite is the optimal alternative to seeking future greater than the supply situation is likely to occur .

3 . Soft ferrite materials demand potential

3.1 Introduction
soft ferrite materials
Soft magnetic material , refers to the remanence and coercivity are very small ferromagnetic material , such as silicon , iron , etc., which is characterized by easy magnetization are susceptible to demagnetization , it is widely used in electrical and electronic equipment , such as 4G devices, network devices, and display assembly areas . Currently the application of soft magnetic materials with soft ferrite majority, by purpose and materials can be divided into four categories: ① MnZn power ferrite materials ; ② communication and electromagnetic compatibility (EMC) with high permeability MnZn iron ferrite material ; ③ deflection coil MnZn ferrite materials ; ④ RF broadband and electronic interference (EMI) suppression of nickel zinc ferrite .

3.2 Future demand will increase ferrite

Present information industry development faster and faster, and has become an important pillar of the world economy industries, so as an important foundation for the information industry functional material ferrite has become the world's new materials industry an important part , but soft magnetic ferrite materials demand is bound to continue to increase. According to China Association of magnetic materials and devices industry forecasts , in 2012 our ferrite materials market demand will reach 430,000 tons , accounting for 70% of total world demand . So soft ferrite materials will face new historic opportunity.

Gradually increase the intensity of rare earth industry consolidation

As the worldwide total reserves of rare earth resources, 100 million tons of industrial , China accounted for 36% of world reserves , is 3,600 tons ; 2012 global NdFeB production was 9-11 million tons, while China's output to reach 8-9 million tons, total output of other countries, only 1-2 million tons. Therefore, China is the largest producer of permanent magnet materials , including rare earth production, exports and consumption volume ranked first in the world . In other words , the global annual consumption of about 10 tons of rare earth is mainly relying on our supply .

In fact, China 's rare earth extraction annual targets set limits , but a few years ago and not well executed. The reason is that a long time, in the eyes of the developed countries is deemed to be national strategic resources and rare earth protection measures , the United States, 2011 U.S. rare earth reserves of 1,300 million tons, but production has only zeros. The rare earth resources in China is being used as a tool for foreign exchange . Therefore, driven by economic interests ,2005- 2009 five-year period , China's rare earth production for more than 100,000 tons , of which 2008 production of rare earth is as high as 124,800 tons . Exports rose at the same time also led to over-exploitation of rare earth in China , based on reserves of a significant slowdown .

The government cracked down hard on illegal rare earth out of private mines, especially in Ganzhou Rare Earth private mining crackdown , resulting in recent rare earth prices rebounded sharply incentives. Praseodymium, neodymium rare species like the price rose to varying degrees . Among them, praseodymium oxide from the mid-year 371,000 yuan / ton, up from the current 570,000 yuan / ton, or more than 50%. After many years of both national governance, the degree of concentration legitimate field of rare earth has been significantly improved , China's supply of rare earth have become legitimate 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 large groups , the basic industry expected to face the situation improves , rare earth prices will rise so full recovery , corporate earnings will bottom out .


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