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REE Monthly Review

Oct.12 2019      Source:ruidow


In September 2019, the rare earth market experienced fluctuating price, with the overall price trend downward. The main factors of the increase in that month shall include unissued directive plans, harsh verification of rare earth enterprise directive plans, and shortage of raw materials of some upstream factories. Dominated by praseodymium, some big factories began to buy oxide, the market witnesses from the testing sale to the general reluctant to sell. The price trend shows rising in the first half of the month. .

    In addition, the downstream orders of magnetic materials increase. In the case of the arrival of the peak selling season, the downstream procurement rise also constitutes the main support of this round of rise. It still keeps restraint during the price rise stage. Price keeps orderly rise and within the normal scope.

    Before the Mid-Autumn festival in the first half of the month, the north leading enterprise buys praseodymium oxide. All southern factories report the insufficiency of oxide inventory, along with the shortage of domestic ore resources and the surge of scrap material price. After the Mid-Autumn festival, the downstream enterprises are not hurried to supplement the inventory for the National Holiday and next month. Neodymium keeps the rise position of the relative high price. In addition, trade negotiations between China and the United States have sent signals of easing each other, and public opinions on rare earths have weakened. As a result, some manufacturers and traders began to slacken the price for goods, which inevitably led to enterprises following the trend and prices of various products dropped rapidly. 

    In late September, Tengchong customs temporarily cleared myanmar rare earth imports, with the initial clearance period of one week. But this policy remained to September 28. Moreover, it may not be closed within the following up short-term period. This may cause psychological impact on the domestic rare earth market, especially the rare earth market. The prices of dysprosium, terbium, praseodymium and other products slowed down quickly.

    The downstream enterprise inventory is insufficient before National Day. The rigid replenishment demand recovers the weak parts. Praseodymium appears a modest rebounding, with little significance. The overall trending shows temporary falling and keeps stabilized at the end of the month.

In terms of short-term forecast in the future, there is not much demand for replenishment after the holiday. The downstream is bound to wait and see the fall. Especially the upstream metal factory has a large shipment demand and the trend is difficult to rise. Meanwhile, the instruction plans are delayed. Due to the limitation of raw materials, the cost of oxides will not be reduced within the short term. Supported by the cost, praseodymium product price won't decline excessively. The overall price may keeps slightly stable. Dysprosium, terbium and other heavy rare earth products with the impact of Tengchong customs clearing, it is difficult to maintain stability. Luckily, the sources are relatively concentrated and the pull-down tendency of bulk cargo is not strong, thus the price will not fall dramatically.

    From the four seasons, speculations in the industry about the directive plan are mounting. The industry watchers reckon the indicators in the second half year will increase than the first half year, operated as per the 13th Five-Year Plan. However, the inspection of indicators in the second half of the year will be more rigorous, and enterprises’ overdraft and overproduction will be restricted, which will become the biggest variable on the supply side in the next quarter.

    Moreover, compared with the import data from overseas rare earth from January to August, Tengchong Customs implemented five-month closure. The import volume from Burma is increased on year-on-year basis. The importing quantity from American rare earth is doubled suddenly. If Tengcheng Customs cannot be controlled, Myanmar’s imports will be more and harder to control. The foreign supply side of the fourth quarter will be inevitably increased.

    In terms of demand, there was a certain amount of foreign purchase before Christmas, but the overall demand only increased slightly, which was far less than the supply. Moreover, foreign mineral resources are the biggest factor. The trend of rare earths in the fourth quarter is not very optimistic without considering unexpected factors such as state reserves.

    There are a lot of negative factors in October, without bright spots in demand and a possible increase in supply. As the impact of the China-Us trade talks on prices becomes weaker, policies other than state reserve are not as strong as they used to be.

     In terms of state reserve, there is very little possibility in the fourth quarter. In terms of Tengchong Customs, analyzed from the feedback of the related enterprises, it will not close down the import, but the follow-up conditions remain to be tracked.

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