In the past 2 days, a-share rare earth permanent magnet concept stock has experienced a “roller coaster.” May 16, the concept of rare earth permanent magnet set off a wave of trading, Northern Rare earth (600111), Guangsheng nonferrous (600259), Shenghe Resources (600392), Minmetals rare earth (000831), Medium color Shares (000758), Ningbo Yun Sheng (600366), East Fujian Electric Power (000993), North Mine Technology (600980) and other nearly 20 stocks collective trading. On the same day, the A-share market also in the low after the concussion higher, the three major stock indices are red reported. However, the wave of trading is only a flash in the pan. May 17, A shares high and low walk, the three major stock indexes fell more than 2% at the same time, rare earth concept stocks also closed with varying degrees of decline. Northern Rare earth closing price of 10.99 yuan/share, down 1.96%; Guangsheng colored closing price 37.50 yuan/share, down 5.52%; Xiamen tungsten Industry closing price 13.33 yuan/share, down 6.59%. What factors caused the roller coaster market?
For the previous day’s rise, the industry is widely believed to be caused by short-term supply concerns for rare earths. November 3, 2018, Yunnan Tengchong customs banned all Burmese resources imported into China, including rare earth mineral resources. December 14, 2018, Tengchong customs in response to Myanmar rare Earth mine clearance, the implementation period of 5 months, that is, from May 2019 onwards will be a total ban on the import of rare earth minerals into China; February 14, 2019, the municipal government of Tengchong, Yunnan province to completely stop the export of rare earth related chemical raw materials to Myanmar, coverage including Tengchong Yunnan Beach Port,
As well as the state-level port Chicho and the surrounding port. According to Tengchong customs clearance operations staff, the closure of rare earth imports and the export of rare earth related production materials is a unified deployment of the local government, mainly considering the safety of domestic migrant workers, and other factors such as domestic industrial regulation.
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He said that the gathering area of rare earth development in Myanmar, there are contradictions between local armed forces and Burmese Government, the interests of the two are not consistent, the safety of local migrant workers is difficult to guarantee. Notably, before the ban, Myanmar was China’s largest importer of ionic rare earths. According to customs data, Myanmar imported 25,800 tonnes of mixed rare earth carbonate (about 20,000 tons of oxides) in 2018, accounting for 85%, and the domestic medium-weight rare earth quota (about 20,000 tons) is comparable. However, monthly data showed that the number of rare earth carbonate imports in November 2018 and December fell by 69% and 59% respectively compared with October of the same year.
The market predicts that the supply of medium-heavy rare earths in China will be significantly reduced after the closure. “Not only are offshore mines not coming in, we are still shutting down, and there is less supply,” a person from a large rare earth group told surging News.
“This person refers to the shutdown is, since 2017, the domestic heavy rare earth because of environmental verification and resource costs, some mining is blocked and shut down, the domestic medium and heavy rare earth mineral mining/quota utilization rate has been in a very low position.” It is reported that China heavy rare earth heavily in Jiangxi since 2018 all rare earth mines have been discontinued state, Gannan Rare earth mines have been discontinued for nearly 3 years, has not yet been reused.
The ion-type rare earth quota in Jiangxi Province accounts for nearly half of the national total quota, and the influence of Jiangxi mine shutdown on the supply of medium and heavy rare earths in China is “seismic type”. That is why Myanmar’s imports of medium-heavy rare earths have become an important complement in the past two years.
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Market analysis that once Myanmar imports ore seals, some smelting separation plants or into a “rice-free cooking” situation. Rare Earth is a generic term for 17 kinds of metal elements, known as the “industrial msg” reputation, widely used in electronic information, petrochemical, metallurgy, machinery, energy and other 13 fields more than 40 industries. The reason why it has become the focus of resource competition lies in its ability to apply to military high and new technologies such as missiles, intelligent weapons, navigation instruments and jet engines. In particular, medium and heavy rare earths are considered to be a strategic resource. China’s rare earth ore is mainly divided into Inner Mongolia Baotou Baiyun Ebo Rare Earth ore as the representative of the mixed light rare earth ore, Sichuan Mianning fluorine cerium light rare earth and the southern medium heavy ion rare earth ore. In recent years, China has supplied 70% of the world’s production with nearly 40% of its global reserves.
How to effectively supervise and exploit the dispersed Southern ionic mines has become an important part of protecting China’s strategic resources. However, China is shifting from a major exporter of rare earths to a major importer of rare earths amid ongoing government measures such as “rare earth black”. ASEAN countries such as Myanmar, Australia and the United States are important sources of rare earths imports in China. It is worth mentioning that the United States also maintains a high degree of dependence on rare earth magnets in China, taking into account such factors as the cost of restarting the mine and the impact on the environment. In the US list of tax increases for China, rare earths, key minerals and other resources are not on the list. In a study, Tian Feng Securities pointed out that this reflects the United States on China’s rare earth resources, magnetic materials are still strong dependence.
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