CITIC Securities: Expectations for Tightening Spot Demand Rise, Rare Earth Prices Likely to Increase

According to Golden Ten Data on July 10, a research report from CSC Financial indicates that due to tightening scrap supplies and lower operating rates at recycling enterprises, overall rare earth production has been reduced. According to SMM, praseodymium-neodymium oxide output in June decreased by about 6%, and the proportion of recycled praseodymium-neodymium oxide in total praseodymium-neodymium oxide output dropped from 44% in May to 37% this month. On the supply side, overall conditions remain tight and there is little expectation of an increase in the short term. On the demand side, air conditioner sales are booming in Europe during the hot weather, with each air conditioner requiring around 0.1–0.2kg of rare earth permanent magnets. At the same time, magnetic material manufacturers have relatively low inventories. With the peak season for stocking air conditioners and the demand spike for automobiles in the third quarter, magnetic material manufacturers are expected to gradually increase their purchasing intensity, and rare earth prices are likely to rise.