Market has been a large number of proposed backdoor square just around the corner , IPO shut down period even more so.

They are always looking for within the total share capital of 200 million shares , worth 1.5 billion or less, are still struggling with losses of listed companies. In their view, such a listed company is the ideal high-quality shell resources . Xiangtan Electrochemical satisfy all the conditions above .

Total share capital of 139 million shares , total market capitalization of less than 11 million yuan last year after another loss in the first half of this year , and is expected in the third quarter losses will continue to increase . Moreover, due to the dominance of state-owned major shareholder restructuring is to let investor confidence , but the 2012 reorganization of the news so far , investors expect the reorganization did not materialize.

Although Xiangtan Electrochemical almost all the qualities with high-quality shell resources , but other companies want to backdoor Xiangtan Electrochemical not easy.

Ideal for carrying over 900 million liability Shell Resources

The first half of 2013 , total assets of Xiangtan Electrochemical $ 1.3 billion , while attributable to shareholders of listed companies net assets of only 297 million yuan , total liabilities of 944 million yuan , asset-liability ratio reached 72%

Just from the market , the current deep households in cities less than 12 billion total market capitalization of less than 100 , but still can not remove the backdoor listing of GEM companies , the remaining 70 or so also . Xiangtan Electrochemical backdoor is highly sought after one .

Xiangtan Electrochemical total share capital of 139 million shares , compared with 2007 in 7540 when newly listed shares increased by about 6500 shares. Investment banks are looking for shell resources , one of the criteria is less than the total share capital of 200,000,000 shares. In general , lower than the 200 million shares of Shell 's assets will be able to absorb the greater dilution of the old shares for new shares will be smaller .

In accordance with the usual logic , Xiangtan Electrochemical that investment banks are looking for high-quality shell company .

More favorable , for a potential backdoor party that , if you want to have absolute controlling stake after the reorganization , backdoor party need only half the current market value of the asset injection , ie about 500 million - $ 0.6 billion of high-quality assets. If you want to obtain the relative holding power, only need to inject more than the largest shareholder of Xiangtan Electrochemical Group Co., Ltd. shares slightly higher market value of assets.

Xiangtan Electrochemical owned by SASAC Xiangtan Xiangtan Electrochemical Group as the main sponsor , together with other four companies jointly established , Xiangtan Electrochemical Group now holds Xiangtan Electrochemical 46.76% of the shares , with a total market value of about 500 million yuan . This means that future re-side at least inject 500 million yuan of assets or more , it will get relatively controlling shareholder status .

The Xiangtan Electrochemical stake held by other shareholders are more scattered. Two shareholders hold only NSSF Xiangtan Electrochemical 2.75% stake , three shareholder Shanghai Jian Zheng Investment Management Limited held 2.31% . Another seven shareholders are individual shareholders holding at 0.27% -0.41 %, respectively.

Xiangtan Electrochemical relatively concentrated ownership structure, so that backdoor listing or asset restructuring decisions easier , avoiding the costs of coordination between the shareholders had a big problem .

Look , with high-quality shell resource qualification Xiangtan Electrochemical highly sought after as it should be . However, as the restructuring side , in addition to the state-owned controlling shareholders other than hesitant , Xiangtan Electrochemical behind for 944 million yuan of debt, too, have concerns .

Therefore , restructuring or not ? What kind of corporate restructuring introduced ? Critical look at Xiangtan Electrochemical Group major shareholder how to choose .

The first half of 2013 , total assets of Xiangtan Electrochemical $ 1.3 billion , while attributable to shareholders of listed companies net assets of only 297 million yuan , total liabilities of 944 million yuan , asset-liability ratio reached 72%. Of which non -current liabilities of only 059 million yuan , 885 million yuan and current liabilities , current liabilities accounted for more than 93% .

In current liabilities , short-term loans accounted for nearly half of the total amount of 410 million yuan , 450 million yuan over the beginning of a slight decline. However, further increase in notes payable , by the beginning of 281 million yuan to 229 million yuan . Other receivables , prepayments , accrued staff costs and other current liabilities increased significantly .

Right Xiangtan Electrochemical direct result of short-term liabilities pressure comes mainly from short-term loans and notes receivable , both liabilities totaled 691 million yuan , the equivalent of the net assets of Xiangtan Electrochemical more than twice .

Possible future restructuring plan , in addition to re-side shares programs, debt restructuring plan stripping scheme or reorganization will be the key point . But it is undeniable that, as a large state-owned holding enterprises Xiangtan Electrochemical Group , then how to choose the path will Xiangtan Electrochemical restructuring of this high-quality shell resources play the most critical role in the future .

2012 Restructuring died

As Hunan local state-controlled listed companies , the integration of large-scale mining enterprises in Hunan is more realistic . However, the current macroeconomic environment is still not much good can support the integration of mining

Enter 2012 in the third quarter , a loss of Xiangtan Electrochemical began to expand , single -quarter loss amounted to 10.16 million yuan , 25.27 million yuan the first three quarters of losses . To the end of 2012 , the annual loss of face appeared , losses amounted to 49.24 million yuan . Xiangtan Electrochemical operating status faced much more severe than in 2011 .

Since 2013 , Xiangtan Electrochemical also difficult to turn around. 2013 first half net profit of -2395 million. For the third quarter of Xiangtan Electrochemical performance , the market is expected to continue increasing loss.

Imagine, then Xiangtan Electrochemical faced pressure to perform will not be less than the first half of 2013 and 2012 , while the country's largest manufacturer of electrolytic manganese dioxide has the aura is not important , the most important is how Paul Shell deficits as quickly as possible .

For Xiangtan Electrochemical , the short-term losses realized the only hope is to integrate high -quality asset package or introduce strategic investors to enter and achieve a real sense of reorganization , which is most investors want to see , is not 2012 feint .

Xiangtan Electrochemical intended restructuring , which has been on the market is not a secret .

October last year , the controlling shareholder of Xiangtan Electrochemical Xiangtan Electrochemical Group announced that is planning significant matters relating to listed companies . A month before , as the market spread on Xiangtan Electrochemical restructuring news, Xiangtan Electrochemical the price from 6.58 yuan rose all the way up to the 9.84 yuan .

However, this time nearly a month of re-suspension ultimately did not make the trip. Xiangtan Electrochemical Group major shareholder reason given is the introduction of strategic investors to increase their investment in major matters more complicated, there is uncertainty , decided to terminate the planning of this major issues.

At that time the most popular on the market two versions , one in Hunan Xiangtan Electrochemical integration of rare earth , the other is a group of Xiangtan Electrochemical asset injection , to achieve the overall market. Both stories have not been Xiangtan Electrochemical confirmed, but its restructuring has been very clear intention , but as a state-owned background , but with high-quality shell resources listed company, Xiangtan Electrochemical restructuring optional room is large, negotiating ability.

From the perspective of security shell , the current restructuring of Xiangtan Electrochemical wishes more strongly. More practical problems, as the choice of what kind of company restructuring side , is the Group's parent , or mining enterprises with regional non- high-growth companies like mine ?

Before , Jiangxi rare earth, rare earth , Hunan , Xiangtan securities have appeared Xiangtan Electrochemical achieve backdoor listing of rumors. The industry believes that , as the Hunan local state-controlled listed companies , the integration of large-scale mining enterprises in Hunan is more realistic . However, the current macroeconomic environment is still not much good can support the mining industry consolidation.


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State purchasing and storage plan will be ten billion rare earth opened in October , when the message loud and clear at the time , there are already purchasing and storage enterprises began quietly raising funds to expand production scale , etc., to meet this time the state purchasing and storage .

This is not the first national reserve of rare earth industry , but now it is still being cast a layer of mystery. Country-driven , with enterprises as the main actors of the national reserve mechanism is due to the demands of the state and enterprises are not the same , let it fall into the strategic reserve, or to adjust prices have played a limited role in the deadlock, but instead was leveraging a gray interests of the chain .

List of companies involved in purchasing and storage Exposure

"There is this thing ( national reserve of rare earth ) , it should be the fastest in October , the entire plate will have ten billion yuan purchasing and storage , and is mainly in the heavy rare earths ." September 17 , a year in purchasing and storage rare company insiders told reporters .

Minmetals Rare Securities Department sources told reporters , although the state purchasing and storage , but in fact last year was the invitation to tender in the form of the enterprise , however , a large rare earth enterprises will generally be invited , especially state-owned enterprises .

September 11 , the distribution indicators are rare earth smelting and separation products Minmetals issued "on the 2013 second batch of rare earth mandatory production plan targets adjustment notice," said the Ministry of consent obtained , its two subsidiaries , respectively, from the original 835 ton and 600 ton to 1,335 tons and 800 tons , respectively, up 500 tons and 200 tons. Analysis of the industry , which is probably connected with the forthcoming purchasing and storage are not unrelated.

Rare analyst Du Shuai Bing told reporters , it is understood that the purchasing and storage enterprises have six participating , purchasing and storage products 4000 tons neodymium oxide, praseodymium oxide, praseodymium , neodymium oxide, each 500 tons , 1200 tons of dysprosium oxide , or 1,500 tons oxide, erbium 300 tons , also plans Shouchu europium oxide, terbium each 500 tons , 2500 tons of yttrium oxide or 2000 tons , and lutetium oxide , a total of 10,000 tons or more , and the country will be slightly higher than recent market prices purchasing and storage .

An industry source said the reporter , 10,000 tons more reliable revenue reserves , but europium , terbium , dysprosium three annual product revenue reserves less debatable .

A corporate insiders say , outside of what specific companies won the bid , which products , how much money is difficult to obtain from official sources .

Shouchu funding gap problem

Xiamen University, China Energy Economic Research Center Lin Boqiang told reporters at the national level strategic purchasing and storage supposedly financed by the state out , but we have not yet achieved .

The industry had also been calling for the establishment of national purchasing and storage of rare earth special fund for the use of foreign exchange reserves of rare earth .

Weber Institute for Information Industry , principal analyst Zeng Hai Wei said : "This is good for business thing, so purchasing and storage enterprises funds should be invested mainly in government revenue in the form of subsidies or other companies , or countries have set up a stabilization fund , using reverse cycle operation to regulate the market supply and demand . "

However, as early as May 2011 , the State Council issued " on the promotion of sustained and healthy development of rare earth industry, a number of opinions" , the first of 18 proposed to establish strategic reserves of rare earth system , according to the national reserve and enterprise ( business ) reserves , physical reserves and resources ( to ) reserves combination to build strategic reserves of rare earth . Central government on the implementation of the resources, products and business district reserves subsidies .

However, there has been State Reserve funding problems, together with the volatility of the previous rare earth prices , the central and local state-owned enterprises in the fierce competition in the rare earth resources , are restricting the national implementation strategy for purchasing and storage of rare earth .

Baotou Rare Earth , told a newspaper reporter last year, participate in national purchasing and storage of Baotou Rare Earth Rare Earth International Trade Company is a starting point in its purchasing and storage , purchasing and storage financed by the enterprises themselves out , but until this year only then earth closed state Chu 's revenue back to the enterprise.

"This year I'm afraid purchasing and storage of products obtained national funds next year ," the Funing Rare Earth Industry Co., a senior reporter said, " state purchasing rare breed a lot, purchasing and storage is not a one-off , and the need for a certain number purchasing and storage sustained period of time , and then the purchasing and storage of products up to the State Reserve Bureau of varieties , which are required to spend time . "

Such a high return on investment from where ?

Industrial Funing a senior reporter said that the state will generally have a guide price of purchasing and storage , while the guide price is generally higher than the market price , which will participate in purchasing and storage enterprises to find ways to maximize the benefits , it will be used fund financing the money in the community purchasing and storage of rare earth products cheap , then make the difference among enterprise return on investment cash is not a problem .

The investment company business manager told reporters that last year 's investment is now fully materialize it, and the person stressed to reporters that the project will certainly be used for national rare earth reserve, and not for other purposes.

Private investors - Investment Company - Rare purchasing and storage in the enterprise - SME community or traders , apparently in order to participate in purchasing and storage enterprises as the center of a national reserve clambered over the gray interests of the chain has been formed.

Rare side Zhuo record information Binbin analyst said that the state purchasing and storage of rare earth , the biggest benefit is obviously involved in purchasing and storage of raw materials companies , mainly because the state purchasing and storage to create an atmosphere of action , indirect positive will get the entire upstream rare earth industry , while the downstream application industries have to suffer .

In Baotou Steel Rare Earth , for example, in last year's national reserve is also known by the outside world , " turned a profit ." In the first quarter attributable to shareholders of listed companies net profit of only $ 245 million in the second quarter , but the downturn in the industry counterattack was 805 million yuan , respectively, year on year and up 122% qoq and 229% . Analysts said gold , which is the company recognized in the second quarter of last year, state purchasing and storage of rare earth gains.

Since purchasing and storage among the gray interests of the chain and many other issues , the state purchasing and storage mechanisms earth began to be re-examined. Jiangxi Ganzhou a rare researchers said that at present , including businesses, local governments, state purchasing and storage levels are present, because last year was officially launched at the national level purchasing and storage , purchasing and storage system needs sound , including purchasing and storage purposes , timing, objects, and closing storage type and quantity , but the key point is that in the end who is out of money and so need to straighten out .


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Most analysts still believe that the pace of purchasing and storage plan earth getting closer, "We are expecting within the circle in October there will be relatively clear policy ideas." Said industry sources said.

After July to August after rising continuously, A-share market of rare earth stocks are also into consolidation, many stocks down significantly. However, industry analysts said that in addition to purchasing and storage plans, by the end of the rare earth industry will usher in a lot of good, prices are also expected another wave.

Sang Yong Liang pointed out that the short term, the probability of rare earth prices are still rising, on the one hand, some rare earth production quotas depleted stocks in late September is also running low; fourth quarter and some magnet material into the production season, there is added library needs. Meanwhile, the state will also have a range of rare earth industry to bring good hitting.

Rare earth prices are expected to continue to rise

Giant Kwok-yin said LREE composite price two weeks without much change. But in hitting, purchasing and storage, integration of rare earth policy dividend is expected to clear.

Non-ferrous metals industry analyst Shi Yi also believe that the State Reserve Bureau seems to have become rare in recent years, purchasing "custom", although some revenue reserves outside the quota, but the market supply and demand is expected to change because of purchasing and storage. Rare earth prices rose from 2010 since almost all related with the supply side. Therefore, in the purchasing and storage, large corporations such consolidation is expected backdrop, rare earth prices are expected to continue to rise.


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Yesterday, the Provincial Commission by letter, said the province will campaign against rare earth mining, production, circulation of illegal special action. Taiyuan, 12 companies were included in the verification list of enterprises.

Authorities will act to combat illegal exploitation of rare earth, focused on investigating illegal poaching, exploration and exploitation of undocumented illegal, strictly investigated the presence of rare earth mine production cross-border mining, mining super indicators act against illegal mining (recycling) deposits, confiscated mineral products and illegal income, and be punished. Combating illegal circulation acts, focusing on checking the purchase and sale of rare earth minerals trade enterprises on sale and can not explain the source of the illegal exploitation of rare earth minerals, mineral products and illegal income shall be confiscated and will be punished.


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September 24: Rare earth prices continued weakness today run small decline in prices of some products, manufacturers offer steady mainly due to the holidays approaching, traders shipping price is slightly lower, turnover is still deserted.

Dysprosium oxide mainstream manufacturers tax price 210-220 yuan / ton, the mainstream manufacturers tax price of dysprosium iron 210-220 yuan / ton.

Praseodymium oxide mainstream manufacturers tax price 560,000-580,000 yuan / ton. Neodymium oxide 350,000-360,000 yuan / ton.

Lanthanum oxide manufacturers tax price 27,000-28,000 yuan / ton. Cerium oxide mainstream manufacturers tax price 26,000-28,000 yuan / ton.

Neodymium oxide, praseodymium mainstream manufacturers tax price 350,000-355,000 yuan / ton, praseodymium neodymium metal mainstream manufacturers tax price 450,000-455,000 yuan / ton.

Europium oxide phosphor grade mainstream manufacturers tax price 4,800-5,000 yuan / kg. Terbium oxide phosphor grade mainstream manufacturers tax price 4,100-4,200 yuan / kg.


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Yanling city from starting again " twists and turns " 37 km road , then to the Yanling County Dongfeng Township ridge village. Here , there have been several " guerrilla warfare" , the purpose is to have the two sides compete for a rare earth mine , and now, here 's rare earth minerals have been shut down .

Village Lailiaoyibang "mysterious" man digging

11, the reporter with the Zhuzhou Environmental Protection Century journalists to Dongfeng Township , looked Aoyama grass , particularly charming , but was a large bare loess hills bad " Masaoki ."

Yanling County Land Bureau, accompanied by law enforcement deputy brigade Yanyong Qian introduced piece loess hills, they are being dug , not only destroyed the local ecological environment, but also a lot of this illegal exploitation of rare earth ore . Yanyong Qian said that these people digging mostly from Jiangxi . 2011 , rare earth prices badly, can be sold for 300,000 yuan per ton . Them from the " all channels " that , Yanling territory rich in some places of rare earth resources , so they moved "crooked idea ."

They "afforestation " as a cover to Dongfeng Township ridge village , contracting hills, in the mountains began his "stealth ." First drill in the mountains every 1 m playing a big injection hole bowls , pour syrup inside . Yamashita dig ditches collection , built on the 3-6 dispensers pools , recycling tanks, sedimentation tanks , perfusion syrup collected rare earths.

In order to facilitate shipped out of earth, they are even used in the mountains capped with a gravel country road .

12 have all been shut down illegal rare earth mine

Eventually, or " unmasked " the. The villagers found wrong : field seedlings only grow seedlings, no results ; water also began a pungent odor.

Yanyong Qian introduced , it is because of illegal miners poured ammonium sulfate syrup through surface leakage, direct damage to the local soil composition .

Villagers received the report, law enforcement officers into action , however, " because here the remote location , every time we come , no point on , it was equipped with a walkie-talkie ' lookouts ' found that they ran away . Wait for us a go, they showed up . " Yanyong Qian recalled , such a" guerrilla war " lasted for at least four or five times.

Subsequently, the local department of land in the county started a comprehensive campaign against exploitation of rare earth ore special rectification action , the distribution in the stone Chau, policy source , Long slag, Longxi , rocker , Dongfeng and other places of 12 illegal exploitation of rare earth mines all closed down place.

Rare earth mine shut down , the local government has embarked on ecological restoration problems , hire a professional and technical personnel, tailings water will be recycled to the pool for precipitation , and then carried out in non-polluting emissions and simultaneously re- green mountain .

Yanyong Qian said that in order to restore the mountain green, it needs at least three years. Which looked at the piles of loess, he seems to have an indescribable heartache.


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Ministry of Public Security, Ministry of Land Resources , Ministry of Environmental Protection , Customs, State Administration of Taxation , the State Administration for Industry and Commerce , the State Administration of Production Safety Supervision and Management August 5 jointly issued a notice , according to the "State Council on the promotion of rare earth industry continues healthy development of a number of opinions " " Local governments in the region overall responsibility for management of the rare earth industry "requirement , the inter-ministerial coordination mechanism for member units of rare metals , since August 15, 2013 - November 15 in the fight against rare earth mining, production , the circulation of illegal special action . Some analysts believe that the purpose of this activity is to combat " black chain " to rectify the field of mining and refining production and circulation order, clearing the way for promoting industry consolidation . January 22, 2013 , the State 12 ministries issued "on accelerating the focus of industry mergers and acquisitions guidance" , nine major industry mergers and acquisitions on the agenda , the rare earth industry was included in the list . However, as time goes by , the rare earth industry, mergers and acquisitions , but not as people would like . To this end, including the introduction of industry management department to carry out special activities including a variety of measures , hoping to force policy management , and promote the integration progress .

Difficult situation to promote the integration result is not satisfactory

Rare earth industry has never been so fragile and sensitive . In early July, just the news that the relevant state ministries will carry out special activities to combat the " black chain ," a market that is affected by the policy rebound . So there will be media speculated that the rare earth industry mergers and acquisitions to speed .

In fact , from 2011 to 2013 began the second half of the first half of the rare earth industry downturn . According to "China Metallurgical News" reporter learned of the situation from the Baotou Rare Earth , the first half of 2013 , due to market cold, Baotou Steel Rare Earth production tasks mainly from the backlog . The lack of policy support domestic rare earth enterprises in most production or semi- shutdown state. Industry downturn , the community once again to boost hopes in the industry consolidation . January 22, 2013 , the State 12 ministries issued " on accelerating key industry mergers and acquisitions guidance" , the rare earth industry consolidation task again reiterated .

In fact, the country has been the industry consolidation as the starting point to promote the development of rare earth industry . If you build from the 1993 Inner Mongolia Rare Earth Group , counting 20 years, the country 's rare earth industry consolidation effort has not stopped . By the end of 2012 , and Inner Mongolia Baotou Steel Rare Earth 9 rare earth smelting separation integrate strategic framework agreement signed by enterprises , the integration of rare earth in northern hastily ended. Southern Rare Earth integration is also not optimistic. Despite the strong involvement of the central enterprises , also produced the dominant form of business , but from the control of resources and market impact, relive the situation has not been a material change . Obviously, such a result from the ultimate goal --- the formation of large enterprise groups is still some distance earth .

This integration did not able to "save" China Rare Earth Industry . Although the industry associations and the Ministry has repeatedly said that in 2012 made ​​significant progress in industry consolidation , but the market performance of the different. By the end of 2012 rare earth prices and highest in July 2011 compared to 68% of lanthanum oxide fell , down 72% praseodymium neodymium , europium oxide fell 79.8% . China's rare earth element cerium lanthanum stock up , its oxides or even 20,000 yuan per tonne to 3 million . Jointly by the prices of rare earth enterprises operating results to decline. According to industry for 18 rare earth enterprises focus on statistics, in 2012 compared with 2011 , sales revenues and profits were down 39.91 percent and 43.32 percent .

Promote industrial integration difficulties , the integration of the result is not satisfactory. So, was pinned exactly how rare earth industry consolidation ?

How much joy horizontal joint problems misery

There is no doubt that 20 years advocated the integration of China's rare earth industry is a horizontal integration . In the past a very long period of time , the rare earth industry has been the lack of clearly defined , until it reached a consensus in the industry in recent years : the rare earth industry that involves the rare earth materials , materials production enterprises. 20 years of integration , it is also in the rare earth mining, smelting and separation of rare earth materials production and between enterprises . 2011 introduction of the " State Council on promoting the sustained and healthy development of rare earth industry, a number of opinions " on the clear requirements, we should vigorously promote the integration of resources , significantly reducing separation of rare earth mining and smelting number of enterprises, improve industrial concentration , the basic formation of large-scale enterprises as the leading industry pattern .

From all indications, the industry 's horizontal integration at different times were met with resistance , the rare earth industry restructuring mergers and time and time again abortion. Among them, the biggest obstacle is the different interests unit "system blocking ." In "rare earth kingdom" in Jiangxi Province as an example, mining permits in the form of rare earth resources , focus rests in the hands of mining companies in Jiangxi Province . Demands due to their own interests , local government categorically refused to hand over control of resources . Even Minmetals central enterprises involved in this so-called integrated smelting separation only incorporated businesses, can not involve mineral sources. Lack of resources security of supply , so that Minmetals Rare Earth business segment full of variables. Rare Northern relatively good situation . Since resources are concentrated in the Bayan Obo mine, a move Baotou Steel Rare Earth "hungry " killer , let smelting separation region Enterprises attributed command. But , even so, the Baotou Rare Earth also has its own hiding something : the original smelting separation ability of companies to get beyond the mandatory production plans , integration of new capacity coming on how to digest ? Diluted production plan means more idle assets and waste, are reluctant to any business .

Difficult to promote , so far China's rare earth wars combined smoke is not casual , but do not know when settled . In the south, in addition to Minmetals , Rising , the Big Three JCC wrestling competition, many small enterprises are still isolated muddy the waters, waiting in the wings . Although the North identified the integration of rare earth year to complete the goal , but three years later, Baotou Steel Rare Earth before signing a piece of paper . This paper agreement does not protect it from emerging in the illicit production interference.

In the March 2013 meeting of the China Rare Earth Industry Association member -cum- director of the first session of Congress, China Rare Earth Industry Association, Gan Yong , admits: "Participation integrated enterprise group 's proposal , many remain in the conceptual level, with the integration of enterprise in the assets, business , personnel, planning , were not into effect . "

Origin of successive invisible industry demands

It has been worried about the immediate interests of horizontal integration would create a monopoly . Prophecies come true. Today, this monopoly profits benefit the industrial chain transfer brings difficulties to the development of the industry is bringing a series of trouble.

August 2013 at the Fifth Forum Baotou Rare Earth on the upstream and downstream enterprises become raw material for major , "complained would ." Manufacturers complain that the application of rare earth materials , volatile , which means that only reduce or stop using rare earth materials . The negative effects of raw material prices are also transmitted to the intra-industry . Chengdu Galaxy Magnets Co., Ltd. Chairman Wu Zhijian that raw material prices in 2011 was " Banded ." Breaking the rare earth raw materials price volatility demand balance and stimulate the application of relevant alternatives , resulting in shrinking market . At present, a serious shortage of NdFeB enterprises operating rate .

Rare "door " to strengthen the integration of raw materials within the degree of concentration of the market 's pricing to be exclusive . This makes the "door" foreign enterprises extremely insecure. Although rare earth prices from the second half of 2011 began to fall, but downstream business has been reluctant to take over. One of the reasons , in addition to price , the more is the fear once again subjected to earth " disuse " frustrating .

If you conduct a review on the integration of the calendar year , not difficult to find , horizontal integration solves the problem of centralized management of raw materials , production and market supply of raw materials while filling the application match intensify the conflict . Distribution rights are raw materials enterprises to master , in the interests split is inevitable, " the rich on the poor under the " downstream applications enterprise only passively endure . Over time, even if the upstream integration into large groups, but the lack of application to absorb , digest , diversion, it will be like a lake as unsustainable . Back in 2011 , when declining market just outcrop , an old industry experts predict that the market downturn could last for 10 years. His argument is that the current round of downward due not only to supply and demand imbalance . As the raw material costs and the upstream downstream squeeze profits , and dampen the enthusiasm of end-user applications . This is like a drastic measure , the industry sustains serious injury basis . Thus , the industry recovery no longer depends only on the industry , the need for external conditions with naturally be more ado. While the old experts say too pessimistic , but it speaks of an invisible behind industry adjustment requirements: integration not only to solve the concentration and the problem of excess capacity , but also to solve the problem of the industrial structure . To put it bluntly , is to solve the matching problem downstream industries .

In fact, the coordinated development of upstream and downstream countries has been one of the principles of rare earth development strategies . In the early stages of development , the state is committed to the development of rare earth resources , but also to promote the application as an important task given attention . In the country , supported by the application of rare earth in steel , rare earth agricultural leadership team, rare energy-saving lamps and other organizations established collaborative network applications , the relevant departments organized for many years and even spent a lot of rare earth application and popularization exhibitions. Applied research also never absent in the rare earth research . However, with the restructuring of enterprise reform , it all fell apart . Obtain the right to operate the business and then refused to take the effort beyond the production of raw materials . A business leader to "China Metallurgical News" reporter made ​​such analysis: " Numerous areas of application of rare earth for smelting and separation enterprises, equal access to these areas into the manufacturing process from raw materials . Involved in cross-border interbank unfamiliar areas , business runs a huge risk . "

Externally and internally , the application of traditional Chinese Rare Earth began to shrink . According to 2012 statistics of the National Office of rare earths , the number of traditional areas of application of rare earth only a few thousand tons. Once the national flower of the application of rare earth steel almost stagnant . In traditional applications exit, the application of rare earth new materials become the new darling , but the 2011 changes in the market has hit material production enthusiasm. 2012 Rare Earth Magnets domestic production fell by 11.9% , rare earth luminescent materials production fell by 43.9% .

Today , smelting overcapacity, shrinking the negative effects of the application of radiation to the consumer market began . Expensive raw materials , downstream applications willingness plummeted, smelting and separation products abnormally " oversupply ." 2012 China plans to produce 90,400 tons of rare earth smelting separation production , the actual completed only 82,000 tons . The first half of this year , rare earth prices fell by more than 60% , but trading was light . Raw material production in the long dark submerged AIDS , terminal applications truss contraction, the market's " stagflation " inevitable. If we say , repeated before the ebb and flow of the market supply and demand imbalance , " overreaction " , then today's confusion is entirely industrial chain of "forced correction ."

Insiders clearly see the lack of application of rare earth hazards . Jiangxi Rare Earth Society Meng Qingjiang in China Rare Earth Industry Association, the Third Session of the Standing Council outcry , "Strengthening the rapid popularization and application of rare earth industry is the driving force for sustainable development and the end ." This year in August , Deputy Secretary-General Zhang Anwen Rare Earth Society also Baotou Rare Earth Forum said: "cracked earth dilemma , on the one hand you want to pay close attention to the source , control the volume ; hand to vigorously promote the application of expanding demand ." China Rare Earth Industry Association Secretary-General Ma Rongzhang that industry associations next main tasks is to strengthen market cultivation , build cars, wind power , and white goods area of rare earth application platform.

However, the fracture of the industrial chain is not alone appeals and services convergence . So, who is going to promote downstream butt ? Who is to balance the interests of upstream and downstream magical hands ?

Path industrial extension spontaneous attempt

In recent years , the international economic recovery is slow, reducing demand for rare earths . By this time, has been discontinued foreign rare earths are to resume production. Such a situation, intensify efforts to become China's rare earth application to maintain a prerequisite for sustainable development .

Rare areas of local government is trying to turn raw materials and application of executive power of the industrial chain . One approach is to build a rare earth industrial park. According Rare Association statistics, there have been built or are under construction in rare earth industrial park has 18 as much. The Government's aim is clear , first, the use of investment resources , the formation of clusters of rare earth industry , promote local economic development ; second is that the application use policies relief , repair industrial chain, foster new industries . Unfortunately , the government 's efforts seem little in return . Ma Rongzhang disclosure , the current domestic rare earth park construction in disorder . Joint venture and a handful of end-use applications , mostly for processing of raw materials , these enterprises have the goal of building located in the largest production of rare earth materials , the strongest , exacerbated by excess production capacity of raw materials .

In the hands of administrative frustration occasion , the industry giant has taken tentative steps Baotou Steel Rare Earth . 2010 Rare-Earth and Hebei ENN to jointly set up a rare treasure Bo Baotou Medical Systems, Inc. , and its products as magnetic resonance imaging equipment (MRI). Since its establishment, the company's growing concern. Whether soaring prices of rare-earth or rare earth industry downturn, the company 's production capacity , output increased year after year . In addition to performance , the rare treasure Bo on the Baotou Rare Earth 's greatest contribution is to become the upstream raw material receiving end . It is understood that China's potential MRI market , the annual domestic digestible 1/ 4 of the rare-earth magnetic materials production. Undoubtedly, the presence of rare treasure Bo to gain a competitive advantage Baotou Steel Rare eating a reassurance.

Throughout the industry , on the one hand , smelting separation of enterprises involved in application development through vertical integration there has been inert , raw materials to produce enormous profits so that these enterprises lack the initiative to open up new areas ; the other hand, they are also unwilling to bear the cross operating risks. Over the years, numerous and dispersed downstream applications from small-scale manufacturing enterprises lay over . However, with the application of rare earth high-end, regardless of technology or funding , the downstream business has been stretched , the digestion of raw materials is increasingly weak . By this time, the development of stronger and bigger vision and the reality of the limited market capacity , the industry began to change occupy the dominant position smelting enterprises mind.

The reason to break the routine intervention terminals, Baotou Steel Rare Earth There is another plan . 2010 Rare-Earth developed a "second five " to achieve 10 billion yuan output value targets. Currently, the global demand for rare earths is about 20 million tons. Domestic rare earth enterprises in the completion of integration , at least to keep 4 to 5 , the average annual output equivalent to each company of rare earth oxides only 40,000 ~ 50,000 tons . If only the production of raw materials , so that production can not hold up 10 billion yuan output value . Baotou Steel Rare Earth only to double the value of the application of the terminal to find a way out.

Baotou Steel Rare find is different from the past " similar merger " of a consolidation path: resources as the core, extend the industrial chain , enhance the value of resources . In fact, this vertical integration in the overseas rare earth enterprises abroad has become a strategy to counter China's rare earth . It is understood that a resumption of production of rare earth companies are the industry chain from the production of minerals and compounds , extends up to the production of energy and materials . Byron Capital Markets research team an analyst pointed out : "In the past emphasis on Western companies ' level of division of labor ' , the company than any other company that does well only thing, the scale of production and low-cost access to profits ." "But , in the future longitudinal integration --- complete supply and processing chain integration --- become more meaningful . " in this sense is that , through vertical integration, a reasonable allocation of costs and profits, to keep the whole industry chain of production and profitability .

However, attempts Baotou Steel Rare Earth industry as a whole seems to be a special case . One can imagine , if not greater benefits, smelting separation giants reluctantly immersed in competition for resources and the refining capacity in the contest , the most long-term plan is to expand the scale of production of rare earth materials . View Baotou Steel Rare Earth in the future will find five major industrial chain line , only two lines behind the applications --- magnetic resonance imaging equipment, and nickel-hydrogen batteries , while other areas are still empty .

Leveraging the combined vertical integration would become the fulcrum of it ?

2013 Spring Festival is over , Baotou Rare Earth Research Institute of Sun Xiaohua had constantly run to Baotou Steel seamless steel pipe plant . His hands have a technical project , its research and development of amorphous rare earth magnetic flux leakage probe boots for seamless online testing, not only can import substitution, and low prices . But because of funding , marketing, processing and other reasons , the project has not been able to form productive. Sun Xiaohua hoping to help end users , bringing technology into products . In Rare Earth Research Institute , a project like this there are high temperature resistance of rare earth lanthanum chromite .

" Departure " is not for technical reasons

Over the years , the industry accustomed to the application of weakness attributed to technical factors . From an objective point of view, although foreign patents covering the domestic application of rare earth difficult , but it is not a mineral to be found. China 70% to 80 % of the rare earth materials needed to complete transformation of the domestic downstream enterprises have the opportunity to bypass the patent application , directly to digest raw materials. Huge domestic equipment manufacturing needs, but also for the application of new technologies to provide a space to display . Like the earth , like the amorphous magnetic flux leakage probe boots , some market demand for small but practical application projects in the country are common. China Rare Earth application long slump, the biggest reason is not the technical ability, but rather the industry convergence. Rare saving lamp that is a typical example. In China, energy-saving lamp technology can be described as rare mature , national and even introduced subsidies to promote energy-saving lamps earth . However, the lighting manufacturers for fear of high prices and unstable supply of rare earth , rare earth and willing to produce light . In the current round of market volatility slippery , more than 80 % of the rare earths energy-saving lamp enterprises closed down, a career change. This situation is people feel helpless, absolutely no in between two sectors a reasonable distribution of profits. Uncontrolled raw materials companies raking in profits , thus pushing up the prices of end products . When consumers do not accept this cost is applied directly to the face of market enterprises only leave.

Integration may be of interest to solve the problem. Like the Baotou Rare Earth has quietly done, the raw material production and application development vertically integrated to form a complete industrial chain. Thus, the chain transfer mechanism spontaneously generate profits , coordination of upstream and downstream production, which broke through upstream " stagflation " downstream " imbalances" ills .

Vertical integration or breaking

Sun Xiaohua vertical integration technology can also provide solutions into problems .

Undoubtedly, technology patents heavy blockade , regardless of application technology research and development of new products or technology to transformation, new product market cultivation , needs huge investment . This input is not research funding and national subsidies can give . Meanwhile, the earth is increasingly being used in high-tech fields , and doomed product concise. At this point, a product of a traditional production line is no longer economical. To build the development, production , marketing a common platform , supporting applications profitability through product collection has become a reasonable production path . The ability to meet these conditions, objects , control of rare earth resources , obtained from the resource wealth , in turn benefit from the application of marketing materials business is the chosen one.

Perhaps, vertical integration can solve the most difficult problems is the problem of horizontal integration . Horizontal integration forward in time , local governments do not want to put their own interests because of mineral rights to the integration of enterprise and become resistance. The reason to do so , the Government hopes to attract industry resource that Kewutongshu Golden Phoenix , bringing not only capital , but also the formation of follow-up industry , in a wider range of employment and local economic development to solve the problem . Exactly vertical integration provides a starting point to solve this problem . Vertical integration , the dominant firm on the basis of resource development is bound to extend the industrial chain, so that more applications processing enterprises settled in place , local governments so far fewer concerns.

Active dividend policy

In horizontal integration difficulties when vertical integration may be regarded as a breaking of the policy. However, the vertical integration although signs burst on the scene , but does not represent a conscious choice to become the industry . On the contrary, in reality, vertical integration has suffered severely criticized . Baotou Steel Rare Earth in profit for the year 2012 constitution, the application of the lower end of the industrial chain business profit contribution to the Group is very small, and some are even negative. This annual report sparked discontent , have questioned the practice of industrial extension . Complained about the short-sighted investor is meaningless , you should consider is how to compensate for application investments . The same as state support horizontal integration , vertical integration is also needed support from the policy level . In fact, the policy of state support for application of rare earth , not lack of funds , but more to point the way subsidies to the project. This allows vertical integration, to assume the leading enterprise application upfront investment can not share relief . From another perspective , this also exists to support decentralized infrastructure duplication, piecemeal funding application is not conducive to research topics of significant drawbacks . Therefore, the development of appropriate ancillary support policies, is crucial for promoting vertical integration . Formulate supporting policies may not be required to make sacrifices too , can change the idea : to establish a single injection port , the dividend policy by integrating enterprise distribution , to ensure the whole industry with comprehensive "nutrition ." Perhaps only when the dividend policy rather than face the whole industry chain of a specific project, the integration of enterprises to participate in the initiative was only able to mobilize .

It is also a policy level vertical integration . This integration not only upstream business needs, downstream firms also need . Rare treasure Bo says that even though a lot of national support policies , but because companies ranging in medical equipment, application of rare earth , between the three areas of high-tech to fight separately policy , funding and there are also bars the use restrictions . They are hoping to "free Sanda " support policies of integration into a " combined" to form a better synergies .

Either way, the current , inadequate application of rare earth industry has an impact on the sustainable development of the " bottleneck" factor. The consequent development of ideas of past industry profound reflection . Reflection as find a way out . Vertical integration of the industry is just trying to solve a real problem like the design . Perhaps, this design theory with a strong color , but it is the industry's inherent need a true reflection .


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In addition to individual species of rare earth market today , most of the rare-earth prices being quoted stable, limited downstream market purchases , traders said lower corporate profits .

Europium, terbium market , the recent market price of basic weakness steady. Currently manufacturers and traders from europium oxide quote or stable or slightly lower , according to industry sources Ganzhou , europium oxide is now quoted at 460-480 yuan / ton. Terbium oxide market price was essentially flat with last week , the market was little changed in September , with ticket prices at 400-420 yuan / ton or so.

Dysprosium oxide market , since this week , dysprosium oxide prices continue to fell, today there Ganzhou traders said , the price is low , the current market with votes 2,000,000 yuan / ton supply , it is understood two days right supplier there are different ranges of dysprosium oxide prices downward , and now the market price remained at 2.05 million yuan / ton.

Praseodymium neodymium oxide market , there are certain procurement requirements , vendors offer a smooth at 345,000 yuan / ton. Today's market has some procurement praseodymium oxide , according to a trade supplier said that the current praseodymium oxide market remained stable, the market prices at 58, 59 yuan / ton or so. According to traders with some understanding of the current market demand for limited procurement , overall business is still relatively deserted , and the orders lower profits .

Waste magnetic electric car market , the market continued stalemate deserted two days , subject to funding , inventory and festivals affect some recyclers do not want receipt, offer generally low . Does not offer traders and manufacturers are not receiving more . There are currently quoted went steadily down , the electric car market short scrap magnetic strip 96-97 yuan / kg, long 106-108 yuan / kg , tiles 126-128 yuan / kg. Waste Electrical and markets reflect recyclers in Zhejiang , two days suspended receipt, do not want to market some of the basic offer of receipt 80,81 yuan / month or so. Another Jiangsu recyclers now reflect market stalemate , receiving the price is too low , retail investors are unwilling sellers . At present, Shandong Zhejiang mainstream brushless motor scrap recycling prices concentrated in the 82 yuan / month or so , a small part of the recycling prices slightly higher or lower out of a dollar or so.


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According to sources , the Ministry of Industry and Information Technology jointly with relevant departments should intensify punishment is illegal rare earth mining and pollution control efforts, the formation of a large group of rare earth industry, the results will also be released before the end of the year . Recently, the Ministry of Industry and Information Technology with the relevant departments and local governments on the illegal exploitation of rare earth concentration and control the conduct . The next stage, the Ministry of Industry and Information Technology will conduct spot checks.

Large Group for the year or outcome

August 7 this year , the Ministry of Industry and Information Technology jointly eight departments launched a three-month renovation of the rare earth industry special action. Relevant departments through the establishment of rare-earth management intends to " black list " and categorized for management, to establish long-term regulatory mechanisms, but through the formation of a large group of rare earth industry to improve industrial concentration.

China's rare earth industry consolidation is to " large group " of direction. Recently there is news that a large group of rare earth has now submitted to the State program , once approved program , the formation of a large group of rare earth will be officially launched.

Program will include the formation of a large group of rare earth number, size and thresholds and related standards , which also includes the integration of a large group to bear the tasks . It should be noted that the above program approved in principle , a number of qualified local and rare earth enterprises can be established to prepare a detailed program reporting which, if approved will enter the ranks of a large group of rare earth , the work year is expected to see the outcome.

In fact, in 2011 , the State Council issued the " State Council on promoting the sustained and healthy development of rare earth industry, a number of opinions " and once made ​​it clear with one to two years , the basic formation of large-scale enterprises as the leading rare earth industry pattern.

Notably , the upcoming formation of a large group of rare earths at the policy level will be allowed to force integration of existing domestic rare earth ore and smelting separation upstream companies , rare earth resources will be further concentrated to a large group . In order to better accomplish the integration of rare earth targets , reporting a large group of rare earth rare earth enterprises , we must first carry out an internal integration and rare earth resource optimization , especially in the integration of the region , while smelting enterprises to bear the separation of " reduced capacity " of the task , if not reached to the requirements will not be approved .

"Rare earth consolidation and reduction of production capacity will require substantial financial, human and material resources , but also to the interests of the game a lot , for the rare earth enterprises is not an easy thing ." Domestic a rare large-scale enterprises , frankly .

" Competition " staged

It is reported that , despite the large group of rare earth solution has not yet formally introduced, " tournament" already staged. On the one hand , regional integration within the earth accelerated last year, including Guangdong , Hunan, Fujian and other places have been set up rare earth industry group, the complete integration of rare earth resources in the province , while the master of 95% heavy rare earth production in southern city of Ganzhou Rare Earth and leading the production of 90% of the light rare header in the " staged " Integrating drama. On the other hand , including Minmetals, aluminum and other central enterprises have begun to accelerate the rare earth industry chain pace of mergers and acquisitions to become a major contender large group of rare earths .

According to industry analysis , in accordance with the program of integration ideas, Baotou Steel Rare Earth , Minmetals Rare , Ganzhou Rare Earth Group , aluminum , colored Rising , Jiangxi Copper ore with rare earth resources , including large enterprises more competitive advantage . At present, the whole earth prices continued to slump, will undoubtedly promote the formation of large groups accelerate industry consolidation will benefit the rare earth industry out of the woods .

Note that , by the first half of the rare earth product prices continued to fall, recently published semi-annual data listed rare earth companies are not optimistic , including the Baotou Rare Earth , Rising colored , Xiamen Tungsten , China Minmetals and so varying degrees results decline. Among them, the Baotou Steel Rare Earth recently released semi-annual report, first-half operating income of 4.832 billion yuan , down 23.27% , net profit of 1.051 billion yuan , down 33.03% . Rising colored released half-year results for 2013 show that in the first half operating income of 495 million yuan , down 55.94% , net profit loss of 69.22 million yuan, down 835.63 percent .

For the distribution of China's rare earth resources divided north and south , the northern light rare earth resources in the earlier integration has been completed and is currently focused primarily on the integration of the heavy rare earth resources in the South integration .

Jiangxi Ganzhou is the heavy rare earth resources in our region with the largest , most focused on the southern region of rare earth resources. In September 2012 issued by the Ministry of Land and "rare earth exploration list" and "rare earth mining rights list" shows that 10 rare earth exploration licenses in Jiangxi Province has three , Gansu has two , Fujian, Guangdong, Guangxi , Inner Mongolia Sichuan each one . The 67 rare earth mining warrants , Jiangxi has 45 , Sichuan has seven , five , Fujian , Guangdong, three , two , Yunnan , Hunan, Guangxi and Shandong have one .

Among them, in the south six provinces with rare earth resources , rare earth reserves in Hunan bottom of the rankings . The mining rights in Jiangxi Province, 45 , 43 are Ganzhou Rare Earth Mining Group.

However, because since 2011 , prices of rare earth products are too serious , the state now wants to control production to stabilize prices, led to the current cut-off in the semi- isolated part of the state enterprises , the average capacity utilization of only 30%. The Minmetals through the Group strengths in the rare earth trade links champion , and through the acquisition of rare earth products in the country , in the traders had a lot of cake .

Market structure or clear

At present, China in the north and south regions have formed their own enterprises , while also accelerating the pace of SMEs exit , industry concentration has improved significantly .

Analysis of the industry , industry chain integration , capacity optimization is the key work of rare earth industry , and the implementation of the work is bound to have a significant impact on the whole industry , concentration is increased, the rare earth market will rebound into the channel , the relevant listed companies will greatly enhance the core competitiveness . Meanwhile, the supply and demand straighten out , the rare-earth prices will go up again.

Related statistics show that China's rare earth industry management work in there are still many problems to be solved , the illegal exploitation of the problem is growing worse . In 2012, China's rare earth production reached more than 40,000 tons of illegal , illegal smelting products reach more than 50,000 tons , the export smuggling phenomenon is also more prominent in some places . In addition, the environmental pollution problems in the rare earth industry insiders have also occurred .

China Rare Earth Association Secretary-General Ma Rongzhang August this year, the forum in Baotou Rare Earth , says that at present the country illegally rare earth production capacity has nearly legitimate businesses combined. In 2012 , for example, the South of heavy rare earth minerals total of 13,400 tons of mandatory plans . But according to Rare Earth Industry Association statistics, in the South mine in 2012 to produce at least 3.7 million tons, which can calculate the separation of the South smelting enterprises to obtain 70% of the ionic minerals from unknown sources .

As for the rare earth industry consolidation , industry experts said that with rare special rectification action unfolds, but also the climax of industry restructuring , the establishment of a large group of rare earth industry in the future in the market has laid a clear foundation , big corporate mergers and acquisitions also entered a new stage.

The above analysis, on the one hand , at the national level to encourage mergers and acquisitions work unfolded, to leading enterprises as the center, the whole idea of ​​SMEs eliminated achieved a major breakthrough , a small , chaotic, and poor phenomenon has been suppressed ; hand, Rare the promulgation and implementation of purchasing and storage policy effect is obvious, and not because of the rare earth industry violent vibration from the market and severe decline , the industry has begun to show signs of stabilization and recovery out .


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According to the U.S. Geological Survey Bureau statistics, in 2012 the global production of rare earth (calculated as oxide) was 118,900 tons, and in 2011 was essentially flat. Compared to recent record highs of more than 10% reduction by 2010, after the start of the year is still in a sluggish state. In addition to the implementation of China cut, the new mines outside of China plan was postponed. Development of rare earth thermal cooling, in large part because of reduced demand in Japan. Japan had accounted for over 10% of global demand. According to the Japan New Metals Association statistics, in 2012 Japan's domestic demand for rare earths is 14,470 tons, 31% less than in 2011. Especially for the magnets and rare earth glass abrasive materials fell significantly.


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