ISE - Rare Earth Elements Market Report for September 2019
ISE - Rare Earth Elements Market Report for September 2019
The REE market is recovering, the industry report assumes that prices for REE will continue to rise in the second half of the year.
On September 20, 2019, the report of the China Rare Earth Industry Index (hereinafter referred to as “the Report”) jointly prepared by the China Economic Information Society and the Baotou Rare Earth Element Exchange was officially published.
The report clarified that China's booming Rare Earth Index in the second half of the year was 123,55 points. Compared to the previous year's value of 101,08 points, it has increased by 22,22 percent.
The rare earth industry has been at a low level since the first four months of the year and has recovered strongly since mid-May, when the price of rare earths rose by 20,09 percent.
Affected by the industry's high momentum mid-year, companies expect orders to increase in the second half of the year, growing sales territories and an increase in the rare earths market, the report said.
Rare earths are widely used in agriculture, industry, the military and other industries. Not only are they an important prerequisite for the production of new materials, they are also an important resource in the development of state-of-the-art national defense technologies.
Due to the different physical, chemical and geochemical properties of the rare earth elements and the requirements of the separation process, the rare earth elements can be divided into light, medium and heavy rare earth elements.
The report found that from the supply side, the ban on imports of Burmese rare earth in Yunnan Tengchong led to a decline in the domestic supply of heavy rare earths. Given the current situation of resumed duty, it is uncertain that as the progress in restoring domestic production capacity is slow, prices for medium and heavy rare earth products will continue to rise.
On the demand side, the foreign market is heavily dependent on China's rare earth magnetic materials, and demand will not be significantly reduced due to the short-term impact of the external economic environment. At the same time, market growth in new battery-powered vehicles, wind turbines, rail transport and other post-shelf rare earth applications is evident, and prices for rare earths are expected to continue to rise in the second half of the year.
The report also indicated that rare earth stocks and funding levels are lower than the growth line and in the "recession" area in the second half of the year.
The inventory status index is the lowest with 87,9 points. Accordingly, 64,52 percent of companies surveyed forecast an increase in warehousing costs in the second half of the year, which increases production and operating costs, reduces operating income and, to some extent, reduces inventory levels.
From the perspective of the industrial chain, the rare earth industrial chain is divided into
Upstream - rare earth mining and separation
Midstream melt separation
Downstream - high-end product processing.
China dominates the extraction and mining of rare earths in the world, the report said. Last year, the global production of rare earth minerals was 170.000 tons, while China produced 120.000 tons, which makes up 71 percent of the total.
Since China's electrolysis and separation technology is the world leader and production costs are low, even if there are rare earth resources elsewhere in the world, the mined rare earths must be treated by China. This is one of the reasons for the delay in mining rare earth mines overseas, the report said.
