China is the only country with a complete rare earth industry chain. After years of industrial policy regulation, China’s rare earth industry has entered a new stage of intensive development. In the context of the upgrading of the global energy structure, the demand for permanent magnet materials represented by neodymium, iron, and boron is opening up. China’s global leading position in the rare earth industry chain will continue to deepen, and the strategic resource value of rare earth is expected to continue to increase.
China is the country with the richest rare earth resources in the world. In 2021, the rare earth reserves will be 44 million tons (converted into REO), accounting for more than 35% of the world; The output reached 168000 tons (converted into REO), accounting for more than 60% of the world. After more than ten years of industry regulation and policy control, China’s rare earth industry has entered intensive development from the extensive development stage, the resource concentration has been significantly improved, the industry pattern has been continuously optimized, and the strategic resource position has gradually become prominent. Relying on its unique resource advantages and decades of technological development, China has developed into the only country with a complete rare earth industry chain in the world. The global production capacity of the separation and smelting link accounts for about 90%, and the proportion of magnetic alloy manufacturing accounts for more than 90%, forming an absolute resource advantage and industry chain advantage worldwide.
Rare earths are widely used in military, metallurgical, petrochemical and other fields due to their excellent optical and electromagnetic properties. In the context of the current global energy structure transformation, rare earth permanent magnet materials will serve as the main growth pole, opening up the space for rare earth demand. Permanent magnet synchronous motors in the field of new energy vehicles contribute to the main increase in permanent magnet demand. We predict that the CAGR of neodymium iron boron demand is expected to reach 40% in 2021-2025. The expansion of the installed scale of wind power and the improvement of the permeability of permanent magnet direct drive will also significantly drive demand. We predict that the compound annual growth rate of demand for neodymium, iron, and boron will reach over 30% from 2021-2025. In addition,
Before 2021, China’s rare earth applications were mainly concentrated in mid – and low-end fields, with steady growth in demand. Rare earth price changes were mostly dominated by the supply side. After 2021, the scale of downstream applications represented by permanent magnet motors has rapidly expanded, and the value center of rare earths has improved. At present, in the context of domestic total amount control and limited overseas growth, with the further opening of high-end demand space, we predict that the global rare earth shortage pattern will continue in the next 2-3 years, and the value of rare earth is expected to remain high for a long time.