Based on environmental considerations, in recent years, China's restrictions on rare earth production and trade are gaining more "discourse power" for our country, a rare earth resource.
The rare earth market has “goes well†in the past year – on January 11, a senior executive of the Luzhou Rare Earth Mining Company said in an interview with the Daily Economic News. It is understood that after the pull-up in 2010, the price of rare earth's main products has now doubled, and the strong price of rare earth has also caused the Chinese rare earth enterprises that have suffered losses in the past to turn losses. "From long-term losses to today's strong losses, China's rare earth enterprises represented by Baotou Steel Rare Earth (70.37, -1.28, -1.79%) (600111.SH) have made a beautiful turnaround," analysts said.
Heavy punch management continues. China's Ministry of Commerce recently announced that the first batch of rare earth export quotas in 2011 decreased by 11.4% compared with the same batch last year, and the export rare earths were subject to 15% to 25% tariffs. Rare earth ore and 41 rare earth products were included in the prohibition list of processing trade... Will China be born with three mines like iron ore? We have reason to expect.
The highest price increase of rare earth products is 124%
"Recently, you can pay attention to the strontium iron alloy. During this period of time, the price has increased by about 90,000 yuan." On January 11, a trade company in Beijing told the reporter of "Daily Economic News".
The reporter learned that after the past one year of the rise, not only the strontium iron alloy, the price of some rare earth main products has doubled.
The latest monitoring data provided by the business community to reporters shows that in 2010, the prices of major rare earth products have increased substantially. The prices of three kinds of rare earth representative products such as antimony oxide, antimony oxide and antimony-iron alloy have even increased by as much as 104% and 88%. And 124%. One year ago, on January 6, 2010, the average price of the above three products was 12.2~130,000 yuan/ton, 11.7~125,000 yuan/ton, and 65~670,000 yuan/ton; and as of January 11 this year. The price rose to 25.5~265,000 yuan/ton, 23~235,000 yuan/ton, and 145~1.5 million yuan/ton.
It is understood that after the financial crisis, due to the sharp decline in demand for rare earth products in the world, China's rare earth prices experienced a significant "diving" in the first half of 2008. Among them, the original ore dropped from 76,000 yuan / ton to 64,000 yuan / ton, the rare earth's iconic product cerium oxide, cerium oxide decreased from 220,000 yuan per ton to about 135,000 yuan.
Worse than this, China's rare earth prices were once sold as "radish cabbage prices." Data show that from 1990 to 2005, China's rare earth exports increased by nearly 10 times, but prices have dropped by 50%. According to media reports, before and after 2005, the price of rare earth was as low as 16 yuan per kilogram.
However, the sale of rare earths is now a thing of the past. Wang Caifeng, former deputy inspector of the Raw Materials Department of the Ministry of Industry and Information Technology, told the reporter of the Daily Economic News that rare earths and their products now have relatively reasonable prices.
"With China's policy of restricting multiple storage, mergers and acquisitions, and environmental protection standards, the rare earth market still has a huge room for price increases this year," said Song Zhichao, a rare metal analyst at the business community.
Guoyuan Securities (11.98, -0.07, -0.58%) non-ferrous industry analyst Su Lifeng also said in an interview with the "Daily Economic News" reporter that at present, the price of rare earth has been running at a high level, and some varieties may fall back in the future. However, as a whole, it will remain at a high level. "It should be said that the state has a good control over the price of rare earths. There will still be room for growth in the future, but there will be no large fluctuations, and the situation in which prices have fallen sharply is less likely to occur. ""
Rare earth enterprises "gorgeous turn"
The price increase to the enterprise is undoubtedly the best performance booster. Baotou Steel Rare Earth announced that it expects the company's net profit attributable to shareholders of listed companies in 2010 to increase by more than 1200%.
"From long-term losses to today's strong losses, China's rare earth enterprises represented by Baotou Steel's rare earths have made a beautiful turnaround." Su Lifeng told reporters that last year's strong rise in rare earth prices completely solved the problem for Chinese rare earth enterprises.
Looking back before 2010, as a leading company in the rare earth industry, the performance of Baotou Steel Rare Earth is not “powerfulâ€. It is reported that since the company was listed in 1997, it has had a negative growth in profits for seven years. In the first half of 2009, Baotou Steel's rare earth only realized operating income of 905 million yuan, down 30% year-on-year; net profit also lost 67.187 million yuan.
In 2010, the annual performance blowout of Baotou Steel Rare Earth has become a matter of nailing. It is reported that in the first half of 2010, the total sales revenue of Baotou Steel Rare Earth reached 2.33 billion yuan, a year-on-year increase of 157.3%, and the net profit attributable to the parent company reached 354 million yuan, a sharp turnaround from profit year-on-year; its third quarter report showed that Baotou Steel Rare Earth Net profit for the quarter reached 250 million yuan, a year-on-year increase of 368.67%, and net profit of 604 million yuan in the first three quarters.
Not only the Baotou Steel Rare Earth, but also among the 10 companies that have released the 2010 annual performance forecast in the rare earth permanent magnet concept stocks, 9 companies are happy.
"pricing power" competition
"The Chinese parties continued to pay attention to the rare earth industry last year. Policy regulation directly refers to the drawbacks of the rare earth industry. Under the pattern of occupying the absolute supply of rare earths in the world, the competition for discourse rights has begun to improve." Song Zhichao said that Europe, Japan, and Japan have recently The panic that the country has shown is based on the future control of the rare earth market in China, which can be clearly felt from the continuous improvement of the price of rare earth products in China.
It is reported that China's rare earth reserves account for about 30% of the world's total, accounting for 90% of the market size and trade scale, but the market has no right to speak. “Why is there no pricing power? One of the main reasons is that our domestic rare earth market is in disorder and the export channels are also chaotic.†Zhang Hongtao, chief engineer of the Ministry of Land and Resources, said earlier.
Wang Caifeng told reporters during the recent "International Rare Earth Symposium 2010" that China Rare Earth Association is expected to be established in early May 2011, and China will further grasp the pricing power of rare earth products.
At the same time, in order to change the disorderly situation of domestic rare earth development, the Chinese government has also adjusted the export quotas for rare earths. The data shows that the first batch of rare earth export quotas in 2011 was 14,45 million tons, a year-on-year decrease of 11.4%. The Ministry of Commerce said that the total export quota in 2011 is still under negotiation.
However, the hidden dangers of implementing rare earth export quotas also exist. China's light rare earths have large reserves and wide applications, and heavy rare earth resources are scarce. However, because the quota system does not specifically limit the export of certain rare earth elements, some precious rare earth elements are still being exported continuously. "Which are truly scarce and strategically valuable resources, which are relatively richer and have a larger proportion of civilian use, must be distinguished." Zhang Zhong, general manager of Baogang Rare Earth said.
Just as the three major mines are in the international iron ore market, Song Zhichao believes that the acquisition of discourse rights and pricing power will ultimately be reflected in large enterprises, but “the current domestic resource integration is still only Baotou Steel Rare Earth, and the other large central enterprises. Most of the local enterprises have entered the industry, and their technical experience is insufficient. The ability of scientific and technological research is still in its infancy."
What is more worthy of attention is that "the right to speak of upstream resources is only one aspect. How to achieve the long-term high-tech and high-value-added industries on the basis of sustainable protection resources is to truly control the international voice. "The sales person of a rare earth enterprise in Baotou said.
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