ferrite magnets
Analysis of the supply and demand pattern of rare earths in 2021
Feb 1,2021.

Core logic

In the first half of 2020, due to the precipitous decline in demand for rare earths in the first half of 2020, companies passively destocked them; in the second half of the year, demand rises and production capacity cannot keep up. At present, the overall demand exceeds 5,000 tons per month, which is basically in short supply. It is expected that this pattern will continue in the first and second quarters of 2021, and the price of rare earths is expected to continue to rise.

The main reasons supporting the increase in rare earth prices this round:

At present, the market expects that NdFeB will double in the next 5 years, and the high-performance NdFeB may double by 1.5 times. The production capacity in 2021 will be about 80,000 tons. This is likely to be these high-performance NdFeB by 2025. It may demand up to 250,000.

To this end, all major companies are expanding production to prepare for future consumption upgrades.

The three main types of rare earths include dysprosium oxide, terbium oxide and neodymium praseodymium oxide.

rare earth neodymium magnets supplier

The lowest price of neodymium praseodymium oxide was 250,000. The current quotation is more than 460,000. It has risen to more than 300,000 and has been called back. After 400,000, it has been called back, and then it has risen to 460,000. It is initially expected that the price may reach 500,000 before the Spring Festival and 600,000 after the Spring Festival.

Dysprosium oxide has been driven upwards from around 1.5 million, driven by demand, and is currently quoted at 2.2 million. Dysprosium oxide is currently expected to reach 2.5 million before the Spring Festival, and it is likely to break through 3 million after the Spring Festival.

The price of terbium oxide has continued to rise from 3.5 million at the beginning of 2020, adjusted to 4 million, to 5 million, and has now rushed to 8.8 million.

The most important downstream application terminal of all the elements of rare earth is rare earth permanent magnets, which can account for 80% of the output value of rare earth consumption. Other products have relatively low market value and relatively small consumption, and have little effect.

The significant increase in demand for magnetic materials is mainly for air conditioners, electric bicycles, new energy vehicles and wind power.

New energy field:

The growth rate is very high but the increase is not large. It is still the initial stage of the increase, and the increase will be more obvious as the production and sales increase.

Global new energy vehicles are expected to reach 3 million in 2021, and there will be more than 10 million in 2025. Europe, the United Kingdom and China plan to suspend production of original vehicles around 2030. On average, a new energy vehicle consumes about 3 kilograms of neodymium iron boron. According to the current production capacity, there is a very large gap.

Air conditioning field:

Under the new standards for energy saving and consumption reduction, the demand for neodymium iron boron will begin to increase from June to July 2020.

Ten years ago, air-conditioning compressors were all made of neodymium iron boron, and after 10 years of rising rare earth prices, they were replaced with ferrite.

Before July 2020, most of them are ferrite, which is roughly estimated to be more than 60%.

Now under the new energy consumption standards, all the external machines must be replaced with NdFeB, but the internal machine is not very clear (now part of the ferrite magnets part is NdFeB). An air conditioner needs at least 120 grams of REO and 300 grams of NdFeB.

In 2020, China will produce 200 million air conditioners. If all 60% ferrite is replaced with NdFeB, it is estimated that 60,000 tons of NdFeB will be needed, corresponding to the demand of 20,000 tons of NdFeB REO.

Electric bicycle field:

NdFeB has been used before, but now the quantity of electric bicycles (replacement of shared vehicles to electric vehicles) has increased, and the demand has increased

The demand for wind power is also good. According to the national plan, the installed capacity will at least quadruple by 2030.

On the whole, the downstream field of magnetic materials is growing in an all-round way, and the demand growth rate in 2021 is expected to be 20-30%.

Magnets in new energy vehicles

Supply side condition

The supply of neodymium praseodymium, the production and separation index of 130,000 praseodymium neodymium 26% = 34,000 tons of neodymium praseodymium REO, Myanmar mine 20,000 tons * 25% = 5000 tons, American mine 20,000 * 18% = 3600 tons, Australian mine and front end A total of 40,000 to 50,000 tons of neodymium praseodymium REO.

The output of waste is 30% of NdFeB. The waste is not in the production instruction plan, and the production capacity of waste is not enough. Now the scrap production capacity is 1000+ tons/month REO.

The country's overall strategy for rare earths is to gradually liberalize light rare earths, and medium and heavy rare earths have been under strict control.

The domestic rare earth purchase and storage plan is a big benefit to support domestic heavy rare earth prices. The medium and heavy rare earths in the purchase and storage plan account for a large proportion of the annual output, which is expected to have a greater impact on the supply and demand and prices of medium and heavy rare earths. In addition, Myanmar’s customs clearance still affects the country. The import supply of medium and heavy rare earths in China will have a tightening effect. During the "14th Five-Year Plan" period, domestic rare earth supply may still be restricted by the total amount of mining indicators. It is expected that the supply-side high-pressure policies such as crackdown and environmental protection will continue. Overseas supply in the next 3-5 years The increase is relatively limited. It is expected that the global supply of rare earths, especially the supply of heavy rare earths, may continue to shrink, the supply and demand are imbalanced, and the market price of heavy rare earths will continue to rise.

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