Difficulties: Downstream demand shrinks dragging upstream
The dilemma of the rare earth industry chain stems from the high price of rare earth in 2011. Taking bismuth oxide as an example, in 2011, in just seven months, its price rose from a straight line of 200,000 tons per ton at the beginning of the year to a maximum of 1.47 million yuan/ton. Previously, its price was mainly between 100,000 yuan and 200,000 yuan. Up and down.
Rare earths are excellent magnetic materials, luminescent materials, and hydrogen storage materials. Rare earth prices are so high that downstream companies are unbearable and are looking for alternatives. For example, in Pujiang, Zhejiang, which occupies more than half of the rare earth polishing powder, before the price of rare earths soared, the rare earth polishing powder used in the processing of crystal water bricks in Pujiang market consumed more than 6,000 tons a year, and the price of rare earth polishing powder rose too fast. When Pujiang made discs, it added a lot of other non-rare earth materials such as alumina. Now the amount of Pujiang rare earth polishing powder has shrunk to about 200 tons per month, which is less than half of the annual amount.
The same is true overseas. Since the implementation of the quota system in 2005, China’s annual actual export volume and export quotas have remained basically the same, but in 2011, the actual export volume of rare earths only accounted for 53% of the quota; in 2012, nearly half of the rare earth export quotas were not used up.
Dr. Huang Xiaochun, a professor of humanities at Hirosaki University in Japan, told reporters that Japan is reducing the use of rare earths or looking for alternatives, so the demand for rare earths has declined.
The high price of rare earth has given the smugglers a space. Experts revealed that the total amount of rare earths exported through smuggling even exceeds the total amount of normal exports.
Rare earth mining and separation enterprises have already tasted the bitter fruit of the sky-high price: the price of bismuth oxide has dropped back to 400,000 yuan/ton in two years; at the same time, sales have shrunk dramatically.
Downstream enterprises still have a hard time: In 2012, the operating rate of China's NdFeB enterprises was less than 60%, and the output dropped by about half; the total output of rare earth luminescent materials fell by 50%.
The shrinking demand has caused an imbalance between supply and demand. According to expert data, at present, the output of rare earth smelting and separation is 96,900 tons and the production capacity is 320,000 tons; the output of downstream permanent magnet materials is 90,000 tons and the production capacity is 250,000 tons. Overcapacity is about three times.
Zhang Anwen, deputy secretary general of the China Rare Earth Society, dedicated his life to the rare earth business. He lamented at the meeting that the biggest unhappiness in the past few years was that companies did not learn from history and implemented unregulated prices, which affected downstream products. He suggested that companies should respect the market, instead of stressing that China's reserves are the first and production is the first.
Slightly gratified is that experts familiar with the situation revealed that the results of Japan's search for rare earth substitutes are not optimistic. Except for individual varieties, the use of alternative methods will affect the quality of the products, so after consuming the pre-inventory The demand for rare earths overseas will increase.
Change: Overseas rare earth development and recovery
Due to the long-term low price of rare earths, in 2008, about 95% of the global supply of rare earths came from China. In 2011, the supply of rare earths was in short supply and the price rose sharply, which stimulated the unprecedented development of the world's major rare earth resource countries, and the international rare earth industry began to recover. The United States, Australia, Malaysia, Vietnam and even South Africa have joined the ranks of rare earth development.
According to data provided by Deputy Secretary-General Zhang Anwen, the current production capacity of rare earth producers outside China is 9500-11,000 tons. In 2013, the output will reach 24,900 tons, and the target output in 2015 is 63,000 tons. For example, the US molybdenum company currently produces 3,000 tons, and the target production capacity in 2015 is 40,000 tons.
By then, China will end its unique situation in the rare earth supply market. Because, in 2012 and 2013, China's rare earth mining directive plan is about 90,000 tons; and China's rare earth capacity is maintained at 190,000 tons.
Analysts believe that China's existing rare earth separation capacity is several times higher than demand. If overseas rare earth mines are put into production as planned, rare earth smelting will be seriously oversupplied. By then, the price of light rare earths will bear the brunt of the impact, and heavy rare earths will still be in short supply due to limited supply of resources.
Once the overcapacity is expected to be realized, China’s own digestive capacity is worthy of attention. The downstream application of rare earths has always been a weakness in China. Zhang Anwen believes that Chinese companies should solve the problem of survival and work hard on downstream applications. It is reported that the large-scale, precision and automation level of China's rare earth functional materials production equipment is far from the foreign countries. The level of post-processing and processing equipment needs to be improved. Many components used in rare earth applications have long relied on imports.
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