The whole line is the first to lose the speed of rare earth group consolidation

Chen Zhanheng, deputy secretary-general of the China Rare Earth Industry Association, said at the 2015 International Rare Earth Industry Symposium that as the economic recovery grows, the demand for rare earths in the terminal market is expected to increase accordingly, and the prices of rare earth permanent magnet-related products such as thorium will remain. The rising trend adapts to the relationship between supply and demand. However, because of the large production volume, there is still a lack of upward momentum and it is necessary to continue to develop the market.

As of now, disclosure of 2014 earnings of listed companies in the rare earth industry shows that due to fluctuations in the prices of rare earth products and integration of the industry, last year, the rare earth industry suffered the first general loss and was experiencing an analgesic period.

However, as the rare earth price index rebounded from the lowest point of 133.5 points in December last year to the high point of 151.4 on March 23, it recently retreated slightly to around 140 points. Chen Zhanheng, deputy secretary-general of the China Rare Earth Industry Association, stated at the 2015 International Rare Earth Industry Symposium that 2015 will be the beginning of the return of the rare earth value market.

The industry is gradually warming up. At the time of the first loss in the entire industry, the reorganization of rare earth companies accelerated.

Recently, Jia Yinsong, an inspector of the Department of Raw Materials Industry of the Ministry of Industry and Information Technology and director of the National Office of Rare Earths, emphasized that the primary task of the rare earth industry this year is to accelerate the substantive work of the formation of the six major rare earth groups and complete the national rare earth mine and smelter separation by the end of 2015. Business integration. As a result, the long-term situation of the “more, less, and scattered” rare earth industry in the country is expected to end.

The painful year speeds up reorganization

Recently, China Rare Earth Industry Association announced a set of the latest statistics.

Through statistics on the operation of the 18 key rare earth enterprises in 2014, the association found that the sales revenue of these key enterprises in 2014 was 25.599 billion yuan, which was 58.47% lower than the 62.5 billion yuan in 2011, compared to 37.56 billion yuan in 2012. It decreased by 30.89%, which was 21.12% lower than the 32.91 billion yuan in 2013. Profit decreased from RMB 14.735 billion in 2011, RMB 8.058 billion in 2012, and RMB 3.089 billion in 2013 to an overall loss in 2014.

According to reports, the 18 key enterprises listed in the above-mentioned statistics include 74 subsidiaries of various subsidiaries and branches. Their mineral products account for more than 90% of the total mineral products in the country, and more than 78% of the total amount of metallurgical separations is metal. More than 72% of the total amount reflects the current status of China's rare earth industry.

The 18 major rare earth enterprises experienced a significant decline in their business performance last year, and the main reason was attributed to the decline in the price of rare earths.

The rapid decline in the price of rare earths also dates back to the beginning of 2010. At that time, even leading companies in the industry had to seek price protection through production cuts. At the same time, when chaos in the rare earth industry, such as private mining, indiscriminate mining, and illegal smuggling, has intensified, such chaos has severely squeezed the living space of regular enterprises.

Although the state has joined forces with multiple departments to crack down on illegal companies, the remediation of the sword has not completely eliminated the chaos in the industry. Unplanned exploitation of rare earths still impacts the normal market order.

The above situation has also continued to this day, resulting in the price of most rare earth products in the country bottoming out. Some products plunged below the cost line. The production and operation of the company are struggling. The area of ​​semi-discontinuation of production has been continuously expanded, and the operating pressure of the industry enterprises is obvious.

In this environment, the large-scale restructuring of the rare earth industry kicked off.

Last year, with the standard and support of national policies, the industrial structure of rare earth industries is gradually adjusted. At the beginning of 2014, the establishment of a rare earth group formation plan led by the Ministry of Industry and Information Technology was approved and a “5+1” rare earth group structure will be formed. In the northern part, a northern rare earth group established for the Baotou Steel Rare Earths Group, five southern China Minmetals and Chinalco two central state-owned enterprises, and three local rare earth groups such as Quzhou rare earth, vast non-ferrous metals and Xiamen Tungsten Industry.

According to media reports, local companies such as Baotou Steel Rare Earth, Quzhou Rare Earth, Guangsheng Nonferrous Metals Co., Ltd. and Xiamen Tungsten Industry Co., Ltd. used resources as the link to carry out different consolidation and integration. Minmetals and Chinalco's two major central enterprises competed in the field of rare earth dominance. Winning in the middle can be described as "not easy." In the absence of access to upstream resources, the central enterprises involved in the process of ionic rare earth industry in the south through mergers and reorganization of the downstream smelting separation and deep processing industries, and gradually penetrated upstream.

The Minmetals Rare Earth (000831.SZ), which has a registered capital of 837 million yuan, was established in October 2008 by the Minmetals Group. It has now mastered 14,000 tons of rare earth smelting and separating capacity, which is the largest in the south. Chinalco established Chinalco Rare Earths (Jiangsu) Co., Ltd., which will focus its efforts on the integration of rare earth downstream enterprises in Jiangsu Province and gradually penetrated upstream to obtain rare earth mineral resources.

The plan was approved. In 2011, the State Council released "Several Opinions of the State Council on Promoting the Sustainable and Healthy Development of the Rare Earth Industry." It clearly puts forward that in one to two years, the pattern of rare earth industries dominated by large-scale enterprises has basically taken shape. It has been nearly three years since.

Recently, Jia Yinsong emphasized that this year's rare earth industry must do six tasks. The first and foremost task is to accelerate the substantive work for the formation of the six major rare earth groups and complete the integration of rare earth mines and smelting and separation enterprises by the end of 2015.

At the same time, the Ministry of Industry and Information Technology pointed out that it will resolutely crack down on illegal activities in the production and distribution of rare earths, vigorously develop high-end rare earth application industries, strengthen rare earth production and distribution management, continue to improve industrial management policies and regulations, and complete the formulation of rare metal management regulations and implementation rules. Formulate and complete the "13th Five-Year Plan" development plan for the rare earth industry.

Industry may usher in warmer

The loss of the entire industry in 2014 may be improved this year.

“2015 will be the beginning of the return of the rare earth value market.” Recently, Chen Zhanheng, deputy secretary-general of the China Rare Earth Industry Association, stated at the 2015 International Rare Earth Industry Symposium.

The signs of warming are most directly reflected in the prices of rare earth products. A set of data released by the China Rare Earth Association shows that rare earth prices have rebounded slightly since reaching the bottom in December 2014. China Rare Earth Industry Association price index shows that the rare earth price index has risen back to the high point of 151.4 on March 23 from the lowest 133.5 points in December last year, and has recently slightly adjusted back to around 140 points.

The return of product prices, so that rare earth listed company profits began to rise.

On the evening of April 13, Minmetals Rare Earth released an announcement that the company expects the net profit attributable to the shareholders of the listed company in the first quarter of 2015 to be 2 million to 4 million yuan, an increase of 24.23% to 148.46% year-on-year.

The company's performance growth indicated that, on the one hand, due to the rebound in the sales price of some rare earth products in the current period, the company combined with market changes, increased sales efforts, and operating income increased substantially year-on-year; on the other hand, the profit base of the same period last year was relatively low.

According to the Ministry of Industry and Information Technology, by the end of this year, the six major groups will complete the goal of integrating the nation's rare earth mines and smelting and separation companies. The domestic rare earth resources will be further concentrated. The long-term “multi, small, and scattered” situation of the rare earth industry will be completely reversed.

Not only that, from the perspective of domestic policy, resource tax adjustments, national purchasing and storage expectations are good for many rare earth industry companies to maintain an optimistic attitude towards the industry.

However, Chen Zhanheng stated at the 2015 International Rare Earth Industry Symposium that as the economic recovery grows, it is expected that the demand for rare earths in the terminal market will increase accordingly, and the prices of rare earth permanent magnet-related products, such as thorium, will keep rising, and supply and demand. The relationship is appropriate. However, because of the large production volume, there is still a lack of upward momentum and it is necessary to continue to develop the market.