What are the impacts on rare earth industry in China,as power rationing?

Recently, under the background of tight power supply, many notices of power restriction have been issued all over the country, and the industries of basic metals and rare and precious metals have been affected to varying degrees. In the rare earth industry, limited movies have been heard. In Hunan and Jiangsu, rare earth smelting and separation and waste recycling enterprises have stopped production, and the time for resuming production is still uncertain.There are some magnetic materials enterprises in Ningbo that stop production for one day a week, but the impact of limited production is small. Most rare earth enterprises in Guangxi, Fujian, Jiangxi and other places are operating normally. The power cut in Inner Mongolia has lasted for three months, and the average time of power cut accounts for about 20% of the total working hours. Some small-scale magnetic materials factories have stopped production, while the production of large rare earth enterprises is basically normal.

Relevant listed companies responded to the power cut:

Baotou Steel Co., Ltd. indicated on the interactive platform that according to the requirements of relevant departments of the autonomous region, limited power and limited production were arranged for the company, but the impact was not significant. Most of its mining equipment is oil-fired equipment, and the power cut has no effect on rare earth production.

Jinli Permanent Magnet also said on the interactive platform that the company's current production and operation are all normal, with sufficient orders in hand and full utilization of production capacity. Up to now, the company's Ganzhou production base has not stopped production or limited production due to power cut, and Baotou and Ningbo projects have not been affected by power cut, and the projects are progressing steadily according to the schedule.

On the supply side, Myanmar rare earth mines are still unable to enter China, and the customs clearance time is uncertain; In the domestic market, some enterprises that stopped production due to environmental protection inspectors have resumed production, but it generally reflects the difficulty in purchasing raw materials. In addition, the power cut-off caused the prices of various auxiliary materials for rare earth production such as acids and alkalis to rise, which indirectly adversely affected the production of enterprises and increased the risks of rare earth suppliers.

On the demand side, the orders of high-performance magnetic materials enterprises continued to improve, while the demand of low-end magnetic materials enterprises showed signs of shrinking. The price of raw materials is relatively high, which is difficult to transmit to the corresponding downstream enterprises. Some small magnetic materials enterprises choose to actively reduce production to cope with risks.

At present, the supply and demand of rare earth market are tightening, but the pressure on the supply side is more obvious, and the overall situation is that supply is less than demand, which is difficult to reverse in the short term.

Trading in rare earth market is weak today, and prices are rising steadily, mainly with medium and heavy rare earths such as terbium, dysprosium, gadolinium and holmium, while light rare earth products such as praseodymium and neodymium are in a stable trend. It is expected that rare earth prices will still have room to rise during the year.

Year-to-date price trend of praseodymium oxide.

Year-to-date price trend of terbium oxide

Year-to-date dysprosium oxide price trend.