Analysis review

Supply side: In 2023, the first batch of rare earth mining, smelting and separation total control indicators issued by the Ministry of Industry and Information Technology and the Ministry of Natural Resources were 120,000 tons and 115,000 tons, respectively. Among them, the total amount of light rare earth mining was 109,057 tons, an increase of 22.1% compared to the first batch in 2022; The total index of medium and heavy rare earth mining was 10,943 tons, a decrease of 4.7% compared to the first batch in 2022. From this, it can be seen that the index of light rare earth mining continued to increase, while the index of heavy rare earth mining had slightly decreased, resulting in a greater decline in the young rare earth market in the first half year. After years of governance, the domestic rare earth industry had gradually formed a supply pattern with large groups as the main body and relatively concentrated raw materials. With the continuous development of the foreign rare earth industry, the share of China's rare earth production had decreased from 90% to 70%. The development of the foreign rare earth industry was detrimental to the domestic rare earth market prices.

Import and export: From January to May 2023, China's cumulative total import of rare earths was 73,033 tons, a year-on-year increase of 31.9%; From January to May 2023, China's cumulative total export of rare earths was 20,987 tons, a year-on-year decrease of 4.4%. The export volume of rare earths in China had decreased, and the demand for rare earths had decreased.

Demand side: The continuous development of the new energy industry had provided certain support for the domestic rare earth industry. Due to the introduction of car purchase promotion measures and marketing activities in multiple regions, the production and sales speed of new energy vehicles had increased. In May, the production and sales of new energy vehicles completed 713,000 and 717,000 units respectively, with a year-on-year increase of 53% and 60.2%, and a market share of 30.1%. From January to May, the production and sales of new energy vehicles completed 3.05 million and 2.94 million units respectively, with year-on-year growth of 45.1% and 46.8%, and a market share of 27.7%. Recently, the country had accelerated the construction of charging infrastructure to better support the entry of new energy vehicles into rural areas, which was conducive to unleashing the consumption potential of rural areas and increasing the sales of new energy vehicles. Although the automotive market had grown, the rare earth market still faced significant pressure, with a serious supply-demand contradiction. In the first half of the year, the price trend of the rare earth market had declined.

Market outlook

Although the downstream rare earth industries such as automobiles and wind power developed well in the first half of the year, it was difficult to boost the confidence of the rare earth market. The main reason was that magnetic material companies mainly consumed raw material inventory and had small procurement volumes. The overall decline in the rare earth market in the first half of the year was mainly due to the decline of the rare earth market. The recent global economic situation was not optimistic, and China's exports had been subject to certain restrictions. In addition to the continuous development of foreign rare earth industries, there was still significant downward pressure on rare earth prices in the short term. In the third quarter, rare earth prices may still be mainly subject to weak adjustments, and the fourth quarter will enter the peak season of the rare earth industry, with some growth in production and sales. In addition, with the continuous high-speed development of new energy, new materials, energy conservation and environmental protection industries, there is still a gap in domestic rare earth demand, The development prospects of the rare earth industry are still broad, and the rare earth market may experience an upward trend in the fourth quarter.

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