SMM News: Following our previous analysis of the transportation and wind power sectors, this installment shifts focus to the critical demand drivers in the consumer and construction domains: White Goods , Consumer Electronics , and Real Estate-related applications (Elevators and Power Tools). While these sectors individually consume less magnetic material per unit compared to New Energy Vehicles (NEVs), their sheer aggregate volume makes them indispensable pillars of the Neodymium-Praseodymium (Pr-Nd) market. However, data from early 2026 reveals a troubling trend of stagnation and structural contraction across these traditional strongholds. I. White Goods: The Dual Pressure of Production Slumps and Material Substitution In the white goods sector, Neodymium-Iron-Boron (NdFeB) magnets are primarily utilized in two key applications: compressors for inverter air conditioners and motors for drum and impeller washing machines . 1. Air Conditioners: A Sharp Contraction in Output and Dosage According to data from the National Bureau of Statistics (NBS), China’s cumulative air conditioner production for January-February 2026 stood at 40.118 million units , a staggering 35% year-on-year (YoY) decline compared to the 61.921 million units produced in the same period of 2025. (Reason: This drastic drop is attributed to a combination of factors: firstly, an unusually mild winter across major consumption regions significantly dampened heating demand, leading to a destocking cycle among distributors. Secondly, the real estate sector’s continued downturn has severely curtailed new housing completions, directly reducing the installation of centralized and split AC systems. Lastly, high inventory levels carried over from 2025 forced manufacturers to aggressively cut production schedules in Q1 2026 to avoid capital lock-up.) Looking at the full year, SMM forecasts a marginal growth of 0.96% for 2026, with total annual production projected at 271.095 million units . (Reason: The near-flat growth outlook reflects a mature market saturation where replacement demand, rather than new installations, drives volume. While export markets offer some resilience against domestic weakness, rising trade barriers and logistical costs in key regions like Europe and North America are expected to cap significant expansion.) Applying SMM’s calculation model: Inverter Penetration: 99% NdFeB Motor Penetration: 92% Specific Consumption: Assumed at 100g/unit for 2026. Based on these parameters, the total NdFeB consumption for the air conditioner sector in 2026 is estimated at 24,691 tons , representing a 23% decrease from the 29,163 tons consumed in 2025. The core driver of this decline is twofold: first, the persistently high prices of Pr-Nd since the second half of 2025 have accelerated the industry’s cost-reduction initiatives. Second, there is a clear technological shift towards minimizing rare earth usage. The average single-unit dosage has dropped from 120g/unit in 2025 to 100g/unit in 2026 , as manufacturers optimize motor designs and, in some lower-end models, substitute with ferrite magnets or induction motor technologies where efficiency standards allow. 2. Washing Machines: A Slow Erosion of Demand For January-February 2026, China’s cumulative washing machine production was 18.58 million units , a slight 0.3% YoY decline from the 18.51 million units in the same period of 2025. (Reason: The stability in production volumes masks underlying weakness. The slight dip is primarily due to weak consumer confidence impacting discretionary spending on home appliance upgrades. Furthermore, the export market for washing machines has faced headwinds from sluggish global economic growth and intensified competition from Southeast Asian manufacturing hubs, offsetting modest domestic recovery efforts.) SMM projects a full-year growth rate of 3.1% for 2026. (Reason: This modest recovery is underpinned by government-led "trade-in" subsidy policies aimed at boosting domestic consumption of energy-efficient appliances. Additionally, product innovation in the high-end segment, such as washer-dryer combos and smart features, is expected to stimulate some replacement demand, though the overall ceiling remains low.) Demand Calculation Logic: Drum Washer Penetration: 63% (High-end, 98% use NdFeB) Impeller Washer Penetration: 28% (Mid-range, 50% use NdFeB) Specific Consumption: 290g/unit for drum washers; 240g/unit for impeller washers. Under this model, the total NdFeB demand for washing machines in 2026 is estimated at 27,204.52 tons , a 0.2% decrease from 27,262 tons in 2025. The sector is experiencing a slow but steady erosion of demand. While high-end drum washers rely heavily on efficient NdFeB motors to meet stringent energy labels, the volatility of rare earth prices is prompting manufacturers to cautiously explore alternative motor designs or reduce magnet grades in non-critical applications. Consequently, the industry has adopted a strategy of gradual reduction rather than abrupt substitution, balancing performance requirements with cost control. Outlook: The trajectory for white goods in 2026 is undeniably pessimistic. Both production volumes and technical intensity (dosage per unit) are trending downward, creating a double drag on Pr-Nd demand. II. Consumer Electronics: Volume Resilience vs. Intensity Decline The consumer electronics sector, modeled by SMM, comprises four main segments: Mobile Phones , Tablets , Desktops/Laptops , and Smartwatches . These devices utilize NdFeB primarily for acoustic components (speakers/receivers) and haptic feedback motors, with emerging uses in magnetic charging interfaces. The specific consumption is generally low, ranging from 2-5g/unit , except for desktops which average 15g/unit . Market Performance (Jan-Feb 2026): Mobile Phones: 220 million units (+6.8% YoY). Micro-computer Equipment: 41.956 million units (-31% YoY). Breakdown: 21% Tablets, 27% Desktops, 52% Laptops. Smartwatches: 8.196 million units (+7.8% YoY). (Reason: The divergence in performance is stark. Mobile phone growth is driven by the global rollout of AI-enabled handsets and the replacement cycle for 5G devices, particularly in emerging markets. Conversely, the sharp collapse in micro-computer equipment reflects the post-pandemic normalization of demand; the massive stockpiling of devices during 2020-2022 has led to a prolonged digestion phase. Additionally, extended device lifespans due to improved hardware durability have further suppressed replacement rates for PCs and tablets.) 2026 Full-Year Forecast: SMM anticipates a 1% growth for mobile phones and micro-computers combined, and a 5% growth for smartwatches. (Reason: The muted outlook for computing devices stems from persistent macroeconomic uncertainty and corporate IT budget tightening. For smartwatches, growth is fueled by increasing health-monitoring capabilities and deeper ecosystem integration with smartphones. However, the entire sector faces a cloud of uncertainty due to escalating geopolitical tensions affecting supply chains and rising memory chip prices, which may force OEMs to revise production targets downward later in the year.) Demand Estimation: Mobile Phones: 3,109.8 tons Micro-computers: 2,018.9 tons Smartwatches: 125.06 tons Total 2026 Demand: 5,253.76 tons , a 3% decline from 5,421.19 tons in 2025. The primary driver for this decline is the continuous, albeit slow, reduction in specific consumption. As miniaturization advances and alternative magnetic materials improve, the amount of NdFeB required per device is shrinking. Despite the relatively low single-unit dosage, the massive scale of the consumer electronics industry ensures it remains a significant consumer of NdFeB. Moreover, this sector is characterized by highly standardized supply chains, where major OEMs maintain binding agreements with certified magnet suppliers, making demand relatively stable but resistant to price-driven spikes. III. Real Estate Related: Elevators and Power Tools The final segment covers industries tightly coupled with the real estate cycle: Elevators and Handheld Power Tools . 1. Elevators: Policy Support vs. Structural Headwinds In January-February 2026, elevator production reached 150,000 units , a 7.1% YoY increase . (Reason: This short-term surge is largely attributable to the acceleration of projects that were delayed in late 2025, as developers rushed to meet pre-delivery deadlines before stricter regulatory inspections took effect. Additionally, government mandates for retrofitting old residential communities with elevators in urban renewal zones provided a temporary boost to order books.) However, SMM forecasts a full-year contraction of -3% for 2026. (Reason: The long-term outlook is grim due to the fundamental slowdown in new residential construction starts, which remain at multi-year lows. The debt crisis plaguing major property developers continues to stall new project launches, directly impacting the demand for new elevator installations. While the retrofit market offers some support, it is insufficient to offset the collapse in new building commissions.) Calculation: Energy-saving Elevator Penetration: 90% Specific Consumption: 6 kg/unit (for energy-saving models). Total 2026 Demand: 7,222.6 tons , a 1.3% increase from 7,125.3 tons in 2025. (Reason for Growth: The slight increase in total tonnage despite falling production volumes is entirely driven by the rising penetration of energy-saving elevators. Stricter national energy efficiency standards (GB standards) are forcing manufacturers to adopt permanent magnet synchronous motors (PMSM) over traditional asynchronous motors, thereby increasing the average NdFeB dosage per unit even as the total number of units declines.) 2. Handheld Power Tools: A Direct Casualty of Property Slump Production of handheld power tools in Jan-Feb 2026 was 29.566 million units , down 0.24% YoY . SMM projects a -3% decline for the full year 2026. (Reason: The downturn is inextricably linked to the stagnation in the global and domestic real estate markets. Reduced renovation activities and a slowdown in infrastructure projects have dampened demand for professional-grade tools. Furthermore, high inventory levels in distribution channels across North America and Europe, resulting from over-ordering in 2024, have led to a prolonged period of destocking.) Definition & Scope: According to the National Bureau of Statistics, handheld electric tools refer to portable motor-driven tools operated by hand, including electric drills, grinders, sanders, saws, and screwdrivers . These products are highly sensitive to housing turnover and renovation rates. Demand Calculation: NdFeB Penetration: 60% Specific Consumption: 80g/unit Total 2026 Demand: 9,134 tons , a sharp 13.4% drop from 10,548 tons in 2025. The significant contraction in this sector underscores the deep correlation between the property market and industrial metal demand. As the real estate sector remains in a prolonged adjustment phase, the downstream demand for power tools—and consequently NdFeB—faces sustained pressure. Conclusion The analysis of white goods, consumer electronics, and real estate-related sectors paints a picture of structural weakness for 2026. While niche policy drivers (like energy-saving elevator mandates) provide isolated pockets of growth, the overarching trends are defined by production saturation, inventory destocking, and aggressive material substitution . The combined effect of lower production volumes and reduced single-unit dosages creates a formidable headwind for Pr-Nd prices. In the final installment of this series, we will pivot to the future: examining the burgeoning demand from Low-Altitude Economy (eVTOLs), Robotics (Industrial and Service), and the relentless expansion of Electric Two-Wheelers . These emerging sectors may hold the key to offsetting the declines observed in traditional industries and reshaping the long-term demand curve for rare earth magnets.

From January to February 2026, China's air conditioner production reached 40.118 million units, up 0.7% YoY. From January to February, national refrigerator production reached 16.643 million units, up 6.5% YoY. From January to February, national washing machine production reached 18.579 million units, down 0.8% YoY. From January to February, national color TV production reached 24.678 million units, up 2.3% YoY. In February 2026, China exported 6.84 million air conditioners, up 1.2% YoY; cumulative exports from January to February totaled 13.15 million units, down 6.5% YoY. Refrigerator exports reached 6.93 million units in February, up 26.6% YoY; cumulative exports from January to February totaled 14.91 million units, up 18.6% YoY. Washing machine exports reached 2.7 million units in February, up 18.1% YoY; cumulative exports from January to February totaled 6.1 million units, up 11.8% YoY. LCD TV exports reached 8.53 million units in February, up 34.4% YoY; cumulative exports from January to February totaled 17.69 million units, up 17.2% YoY.

Macro News 1. The spokesperson of the Ministry of Foreign Affairs announced that, at the invitation of President Kassym-Jomart Tokayev of the Republic of Kazakhstan, President Xi Jinping will attend the second China-Central Asia Summit in Astana, Kazakhstan, from June 16 to 18. 2. Li Qiang chaired a State Council executive meeting to deploy the replication and promotion of pilot measures in the China (Shanghai) Pilot Free Trade Zone, hear reports on the construction of a new model for real estate development and the promotion of high-quality housing, and study measures to optimize the centralised procurement of pharmaceuticals and medical consumables. 3. According to data from the People's Bank of China, at the end of May, the balance of broad money (M2) was 325.78 trillion yuan, up 7.9% YoY. The balance of narrow money (M1) was 108.91 trillion yuan, up 2.3% YoY. The balance of currency in circulation (M0) was 13.13 trillion yuan, up 12.1% YoY. Net cash injection in the first five months was 306.4 billion yuan. The increase in aggregate social financing in January-May was 18.63 trillion yuan, 3.83 trillion yuan more than the same period last year. RMB loans increased by 10.68 trillion yuan in the first five months. 4. On June 13, the People's Bank of China announced again that it would conduct 400 billion yuan of outright reverse repo operations on June 16 with a term of six months (182 days), indicating that the central bank would achieve a net injection for the entire month. 5. The World Trade Organization held the second annual meeting of the Council for Trade in Services in Geneva, Switzerland, on June 13. China pointed out the misleading narrative and erroneous logic of the US's "reciprocal tariff" and urged the US to comply with WTO rules, resolve differences through multilateral cooperation rather than unilateral measures, and jointly maintain the stability of the global trading system with all parties. 6. The New Zealand government's official website announced that starting from November 2025, Chinese passport holders entering New Zealand from Australia with valid Australian tourist, work, student, or family visas will be exempt from visa requirements for stays of up to three months. Industry News 1. Eight departments, including the Ministry of Industry and Information Technology, are soliciting public comments on the "Guidelines for the Security of Outbound Automobile Data (2025 Edition)". Automobile data processors shall declare a security assessment for outbound data if they provide automobile data overseas under any of the following circumstances: (1) providing important data overseas; (2) cumulatively providing personal information (excluding sensitive personal information) of more than 1 million individuals overseas since January 1 of the current year; (3) cumulatively providing sensitive personal information of more than 10,000 individuals overseas since January 1 of the current year; (4) operators of critical information infrastructure providing personal information overseas; (5) other circumstances requiring a security assessment for outbound data as specified by relevant state regulations. 2. On the 15th, the official WeChat account of the Shenzhen Municipal Committee of the Revolutionary Committee of the Chinese Kuomintang (RCCCK) published an article by He Jie, Chairman of the Shenzhen Municipal Committee of the RCCCK, discussing Shenzhen's new mission in comprehensive reform. He Jie stated that relevant departments in Shenzhen are currently formulating relevant listing rules, with the expectation of piloting the secondary listing of red-chip stocks, which will provide more convenient and efficient listing channels for science and technology innovation enterprises. He Jie emphasized that the blueprint for comprehensive reform "2.0" has already been drawn up, and the key lies in effective implementation. Many reforms are still framework-based and directional in nature, requiring integration with practical needs, particularly achieving an organic combination of "top-level design and local initiatives." 3. According to statistics from Choice, as of June 14th, 105 public offering products (with multiple share classes combined) have been liquidated since the beginning of this year. In terms of termination reasons, 83 products were terminated due to the net asset value of the fund falling below contractual limits, 21 products were terminated with the consent of the fund holders' meeting, and 1 product was terminated due to contract expiration. Among these, equity liquidations accounted for 70%, with industry-themed funds in sectors such as new energy, pharmaceuticals, and consumption becoming the "hardest-hit areas." 4. The China Securities Regulatory Commission (CSRC) issued an administrative penalty decision. During the period in question, the account group controlled by Tu Wenbin had significant capital advantages, manipulating the prices of multiple stocks through continuous trading, driving up stock prices, large-volume limit-up orders, and false order placements and cancellations. The CSRC decided to impose penalties, with the total amount of fines and confiscations reaching nearly 77 million yuan. 5. On June 15th, a reporter learned from China National Nuclear Corporation (CNNC) that yttrium-90 glass microspheres irradiated by Qinshan Nuclear Power's "Hefu No. 1" reactor were successfully removed from the reactor and passed relevant detections, marking China's successful mastery of the technology for producing yttrium-90 in commercial reactors, enabling mass production. 6. The opening forum of the Golden Goblet Film Forum at the 27th Shanghai International Film Festival was held on June 15th. Participants unanimously agreed that the current film market has reached a moment for a fresh start. Facing industry challenges, chairmen and executives of multiple listed film companies discussed solutions, with directions such as increasing non-ticket revenue, reducing the number of films produced, and lowering production costs emerging as potential solutions. Corporate News 1. Kweichow Moutai announced an adjustment to its 2024 annual profit distribution plan, increasing the dividend per share to 27.673 yuan/share. 2. On June 14th, POP MART Korea issued an announcement stating that due to concerns about potential safety accidents at recent offline sales venues, the company has decided to temporarily suspend offline sales of the entire LABUBU plush toy and LABUBU plush keychain series. 3. GAC Group issued a commitment announcement, stating that it will ensure the fulfillment of dealer rebates within two months from today. 4. Guotai Haitong Securities announced that it has received an administrative licensing decision from the People's Bank of China (PBOC) for the issuance of 15 billion yuan in science and technology innovation bonds. 5. Yong'an Pharmaceutical announced that the company's stock price has risen significantly in the short term, severely deviating from the overall market trend, and there is a high risk of speculation. 6. *ST Tongzhou announced that the company's stock will be suspended for one day on June 16, and starting from June 17, the delisting risk warning and other risk warnings will be revoked, with the stock abbreviation changing to Tongzhou Electronics. 7. Haimo Technologies announced that the controlling shareholder and actual controller are proposed to be changed to Fan Zhonghua, and the stock will resume trading from June 16. 8. *ST Haiyue announced that it will repurchase company shares worth 30 million to 50 million yuan during the delisting consolidation period. 9. Huayang New Materials issued a stock trading risk warning announcement, stating that the company does not possess the attributes of rare earth permanent magnets. 10. Honghui Fruits & Vegetables announced that the controlling shareholder is proposed to be changed to Shenze Ruitai, and the company's stock and convertible bonds will resume trading from the opening of the market on June 16. 11. Ruifeng Gaocai issued an announcement in response to rumors about the board secretary being placed under investigation, stating that the investigation does not involve the company's stock trading and that current production and operations are normal. 12. Haers stated on an interactive platform that its past cooperation with POP MART has been terminated, and the scope of the previous cooperation did not include Labubu. Global Markets 3. According to CCTV News, US President Trump stated on social media in the early hours of the 15th (Eastern Time) that "the United States has nothing to do with tonight's attacks on Iran" and warned that if Iran attacks the US in any form, the US armed forces will "respond with full force on an unprecedented scale." In addition, Trump claimed that the US could "easily facilitate an agreement to end this bloody conflict," but did not elaborate on how the agreement would be reached. 4. On Friday last week, US stocks opened lower and continued to decline, with all three major indices falling more than 1%. The Dow Jones Industrial Average fell 1.32% for the week; the Nasdaq Composite fell 0.63% for the week; and the S&P 500 index fell 0.39% for the week. Most large-cap tech stocks declined, with Intel falling more than 3% and Nvidia falling more than 2%; Tesla rose approximately 2%. The energy sector bucked the trend and surged, with Houston Energy rising more than 119% and US Energy rising more than 55%. Drone manufacturer Airo's US IPO closed up 140% on its first day. Oracle rose more than 7% for the week, nearly 24%, marking its best weekly performance since 2001. Most popular Chinese ADRs closed lower, with the Nasdaq Golden Dragon China Index falling 2.74%. Fangdd Network fell more than 9%, WeRide fell more than 7%, Kingsoft Cloud fell more than 6%, XPeng Motors fell more than 5%, Alibaba, Bilibili, and Li Auto all fell more than 3%, and JD.com, Pinduoduo, and Baidu all fell more than 2%. Investment Opportunities Reference 1. Xiaomi Auto unveils solid-state battery patent; institutions say eVTOL + humanoid robots open up incremental space for solid-state batteries Intellectual property information from Tianyancha shows that recently, Xiaomi Auto Technology Co., Ltd. applied for a patent titled "Solid-state battery composite electrode, preparation method, and solid-state battery comprising the composite electrode," which has been made public. The abstract indicates that the solid-state battery composite electrode disclosed in the patent effectively shortens the transmission path of metal ions in thick electrodes and accelerates the transmission rate of metal ions between electrodes, featuring high electrode loading and C-rate performance. Dongxing Securities stated that with the gradual entry of fields such as eVTOL and humanoid robots into a phase of rapid growth, along with the release of technological solutions and industrialisation application timelines for all-solid-state batteries by various enterprises, driven by sustained new demand, the application and implementation of solid-state battery technology is expected to accelerate, with the industrialisation process already showing an accelerating trend. Battery enterprises with a first-mover advantage in solid-state battery technology and leading application deployment will primarily benefit. Sihan Industry Research Institute believes that AI is empowering industrial transformation, with eVTOL and humanoid robots opening up incremental space for solid-state batteries. 2. AI inference demand is accelerating, and this solution has become a focus for self-development among major cloud providers According to media reports, while GPUs have advantages in general-purpose accelerated computing scenarios, they face challenges such as high costs and power consumption in specific scenarios, prompting buyers to seek alternative types of chips for support. Customised ASIC chips have become a focal point of attention. Recently, NVIDIA introduced NVLink Fusion, directly targeting Broadcom's high-growth market: AI custom chips. This also means there are new entrants in the ASIC chip market. As AI models become increasingly powerful, the demand for AI inference is accelerating, with ASIC customised solutions offering better energy efficiency and cost advantages becoming a focus for self-development among major cloud providers, with upgraded versions typically released every 1-2 years. Guojin Securities believes that compared to GPUs, ASICs can be custom-developed for specific business scenarios, and the substantial demand for inference computing power and cost reduction will effectively drive the growth of ASIC demand. They are optimistic about ASIC design service companies, Ethernet white-box switch producers, Ethernet switching chip producers, AEC producers, and PCB producers. 3. Against the backdrop of strong supply constraints and a concentrated industry structure, these chemicals are currently in a price upcycle Institutions have pointed out that as temperatures rise, the demand for refrigerant maintenance is gradually becoming robust, with genuine sales boosting channel price confidence. Downstream air conditioner production schedules from June to August remain high on a YoY basis, with the demand side continuing to provide positive feedback. The long-term bullish trend for refrigerants remains unchanged. Against the backdrop of equal domestic and international trade quotes for mainstream refrigerants, the performance release certainty of refrigerant-related producers has strengthened. Founder Securities pointed out that refrigerants are one of the largest and most widely applied segments in the fluorochemical industry. The Montreal Protocol has driven the generational transition of refrigerants. Currently, the refrigerant industry is in a phase of accelerated reduction of second-generation refrigerants, quota freezing of third-generation refrigerants, and patent protection for fourth-generation refrigerants. Against the backdrop of strong supply constraints and a concentrated industry structure, second- and third-generation refrigerants are currently in a price upcycle. The downstream air conditioning and automotive industries are expected to maintain growth trends, with third-generation refrigerants expected to see both volume and price increases. In addition, fluorine-containing fine chemicals are a niche but high-quality segment within the fluorine chemical industry, characterized by high product barriers and added value, with significant growth in market demand in recent years. With the development of emerging industries such as new energy and electronics, their market size continues to expand. 4. Institutions Say Defense and Military Demand Expected to Recover, with Long-Term Growth Certainty in Relevant Sectors Research reports from institutions indicate that, as 2025 marks the final year of the "14th Five-Year Plan" and the planning year for the "15th Five-Year Plan," demand in the defense and military sector is expected to recover. Research reports from Northeast Securities point out that, at the current juncture, as the "14th Five-Year Plan" enters its final year, disruptive factors in the military industry have largely been eliminated, and downstream demand is showing restorative growth. Meanwhile, with the impending 2027 construction target, medium and long-term goals also provide clear guidance for the industry's development: to basically achieve the modernization of national defense and the military by 2035, and to comprehensively build the People's Liberation Army into a world-class military by 2050. Along with the recovery in demand and the gradual optimization of capacity structure, the defense and military sector is expected to see significant improvement, with high safety margins and long-term growth certainty.

Copper Pipe & Tube Enterprises' Operating Rate in May Was 81.76%

Guosen Securities released a research report stating that the production schedule data for domestic air conditioner sales in the first half of 2025 (H1) continued to rise. From January to February, production was reduced to accommodate exports, while production gradually increased in March. In addition to seasonal stockpiling factors, the program of large-scale equipment upgrades and consumer goods trade-ins also significantly contributed to this growth. In May, as the 618 shopping festival period approached and demand peaked, the production schedule showed strong growth. Driven by the high summer temperatures in the second quarter (Q2), refrigerant consumption entered the peak season, and trading activity gradually increased against the backdrop of low inventory levels. Looking ahead to the third quarter (Q3), with the continued implementation of the "trade-in policy" and enterprises entering maintenance cycles after high-load production in the first half of the year, it is expected that market prices will exhibit a monthly stepped increase in Q3, and the market is anticipated to further strengthen under mild stimulus.

On May 29, at the 2025 SMM (2nd) Rare Earth Industry Forum hosted by SMM Information & Technology Co., Ltd. (SMM), Su Zhanpeng, an analyst from SMM's Rare Earth Division, shared insights on the transformation of the NdFeB industry driven by policies, the restructuring of supply and demand, and strategies for enterprises to break through. NdFeB permanent magnets dominate the permanent magnet materials market, with high-performance NdFeB leading the industry's development. Overview of Magnetic Materials: Currently, magnetic materials are mainly divided into two categories: permanent magnet materials and soft magnetic materials. Permanent magnet materials possess enduring magnetism and are the most widely used magnetic materials. Among them, NdFeB alloys and ferrite permanent magnet materials hold significant positions in the technological field. On the other hand, although soft magnetic materials can be magnetized under the influence of an external magnetic field, their magnetism is unstable and easily lost due to external factors. Compared to ferrite, NdFeB exhibits higher BH and coercivity, enabling it to provide stronger magnetic performance in a smaller volume. Meanwhile, NdFeB permanent magnets, with their high energy density and stability, are irreplaceable in high-end industrial, new energy, and consumer electronics applications, while ferrite, due to its performance limitations, is mostly used in low-power, low-cost, low and mid-end applications. Overview of NdFeB Permanent Magnet End-Use Markets The end-use markets for NdFeB permanent magnets are mainly concentrated in six areas: consumer electronics, NEVs, clean energy, new-type fields, energy-efficient elevators, and energy-efficient home appliances. Among these, emerging markets such as NEVs, energy-efficient home appliances, wind power generation, and industrial robots account for the majority of the market share. In 2025, the increasing penetration of NEVs, the rise of emerging economies such as humanoid robots and the low-altitude economy, and the national subsidy policies in the home appliances and consumer electronics sectors will continue to inject new vitality into the future market of NdFeB. However, due to adjustments in the real estate market and technological breakthroughs in wind power raw materials, the demand for NdFeB in energy-efficient elevators and wind power generation has decreased. Analysis and Forecast of NdFeB End-Use Demand Affected by export controls, rare earth permanent magnet exports in April 2025 decreased by 45% YoY. In April 2025, rare earth permanent magnet exports were affected by export controls, decreasing by 45% YoY and 51% MoM. However, the cumulative export volume from January to April increased by 2% YoY. Due to the newly implemented export control measures in April, there has been a certain impact on export trade, resulting in a need for improvement in recent export conditions. With the smooth recovery of exports of magnetic materials that do not contain medium-heavy rare earth and the sequential approval of licenses for those that do, rare earth permanent magnet exports will show a trend of recovery, but it will be difficult to restore the original export volume in the short term. China's NEV production in 2025 is expected to reach 17.89 million units, up approximately 29% YoY. According to CAAM data, full-year 2024 NEV production and sales reached 12.888 million and 12.866 million units respectively, up 34.4% and 35.5% YoY. China's NEV market maintained growth momentum in 2024, with sales accounting for 40.9% of total auto sales. NdFeB demand from NEVs reached 57,000 mt, up 38% YoY. In 2025, NEV policies will feature "central coordination + local refinement", promoting market penetration through consumption subsidies, technical support, and public sector pilots. NEV production is expected to maintain rapid growth, with China's output projected at 17.89 million units (up 29% YoY), market penetration likely exceeding 55%, and total NdFeB demand reaching 75,000 mt. China's new wind power installations in 2025 are forecast at 87GW, up 8% YoY. Per National Energy Administration statistics, China added 80.454GW of wind capacity in 2024 (up 6% YoY), with NdFeB demand at 9,735 mt (YoY growth rate down 21%). Due to cost constraints, the penetration rate of direct-drive motors has declined annually, leading to reduced NdFeB demand from China's wind installations in 2024. As a key end-use sector for rare earths, although demand growth from wind power has slowed recently, it remains a major long-term driver for sustained rare earth demand. Projections indicate China will add 87GW of wind capacity in 2025 (up 9% YoY), requiring 8,341 mt of NdFeB. China's 2025 air conditioner production is expected to reach 320 million units, up 18% YoY. NBS data shows China produced 270 million air conditioners in 2024 (up 10% YoY), with NdFeB demand at 21,000 mt (YoY growth rate 26%). Since September 2024, government trade-in subsidies combined with promotional events like "Double 11" and year-end sales have boosted the home appliance market. In 2025, the home appliance sector will demonstrate positive development trends driven by recovering demand, technological innovation, and policy support. Expanded trade-in subsidies will significantly boost air conditioner production and sales. Output is projected at 330 million units (up 25% YoY), generating 26,000 mt of NdFeB demand. It is projected that the production of energy-efficient elevators will reach 1.41 million units in 2025, down 3% YoY. According to the latest data from the National Bureau of Statistics (NBS), in 2024, the national production of elevators, escalators, and lifts was 1.458 million units, a 5.8% decrease YoY. The demand for NdFeB was 7,508 mt, with the YoY growth rate of demand declining by 6%. In 2024, the adjustment of the real estate market had a certain impact on the demand for new elevator installations. In 2025, the demand for elevators in infrastructure, industrial sectors, and retrofitting projects in old residential communities is expected to grow significantly. In particular, the export market in countries along the "Belt and Road" initiative provides new growth opportunities for Chinese elevator enterprises. It is projected that the production of energy-efficient elevators will reach 1.41 million units in 2025, down 3% YoY, and the demand for NdFeB will reach 7,368 mt. It is projected that the production of mobile phones will reach 1.85 billion units in 2025, up 10% YoY. According to the latest data from the NBS, in 2024, China's mobile phone production was 1.68 billion units, up 7.3% YoY, and the demand for NdFeB reached 3,362 mt, up 7.3% YoY. In 2024, the "national subsidy" policy implemented by the state provided generous purchase subsidies to consumers, significantly stimulating market demand. With the recovery of the mobile phone industry and technological innovation, the rare earth industry will gain new development opportunities. The increase in market demand for mobile phones will drive the expansion of capacity and technological progress in the rare earth industry. It is projected that the production of mobile phones will reach 1.85 billion units in 2025, up 10% YoY, and the demand for NdFeB is expected to reach 3,698 mt. It is projected that the production of industrial robots in China will reach 941,000 units in 2025, up 55% YoY. According to the latest data from the NBS, in 2024, the cumulative production of industrial robots in China was 608,000 units, up 41.4% YoY, and the demand for NdFeB was 12,147 mt, with a YoY growth rate of 41%. With the deepening implementation of the national "Intelligent Manufacturing 2035" action plan, combined with special government subsidies for robot industry clusters and the outbreak of emerging application scenarios, the acceleration of industrial automation transformation has been further promoted, leading to a continuous expansion in the demand for industrial robots. 2025 is regarded as the first year of mass production for humanoid robots, and the high growth prospects of this industry have created new growth opportunities for the rare earth permanent magnets market. It is projected that the production of industrial robots in China will reach 941,000 units in 2025, up 55% YoY, and the demand for NdFeB is expected to reach 18,828 mt. Review and Forecast of NdFeB Supply It is projected that China's rare earth mining quotas will remain unchanged in 2025. On February 19, 2025, the Ministry of Industry and Information Technology (MIIT) issued the "Administrative Measures for the Regulation of Total Rare Earth Mining and Smelting and Separation" and the "Administrative Measures for the Traceability of Rare Earth Product Information."According to the "Administrative Measures for Total Volume Control", the scope of rare earth ore products in China explicitly includes imported ores from overseas, monazite by-product ores, etc. For the first time, imported resources have been incorporated into smelting and mining quotas for total volume control. It is projected that the rare earth smelting and separation quota will reach 350,000 mt in 2025. On April 4, 2025, the state announced the implementation of export control policies for medium-heavy rare earth, which partially impacted the NdFeB market. Based on the analysis of the current market situation, SMM expects that rare earth mining quotas in 2025 may remain flat. This includes 251,000 mt of rock-type rare earth and 19,000 mt of ion-adsorption type rare earth. NdFeB production in 2025 will continue to rise due to supply and demand dynamics. As the largest producer of rare earth permanent magnet materials, China has maintained a steady growth trend in both production and consumption of rare earth permanent magnet materials in recent years. In 2024, China's rare earth permanent magnet material production was approximately 246,500 mt, up 14% YoY. It is expected that production will reach 265,000 mt in 2025. In 2025, several top-tier enterprises have expansion plans, including those in Zhejiang, Jiangxi, Inner Mongolia, Beijing, etc. However, due to the impact of export controls, rare earth permanent magnet exports have decreased, affecting NdFeB production and potentially delaying enterprise expansion plans. China's Rare Earth Supply-Demand Pattern and Market Outlook Monthly NdFeB Supply-Demand Balance and Future Projections The supply-demand gap widened in November-December 2024, mainly due to the concentrated release of end-use demand at year-end, such as wind power projects pushing for annual installation targets at year-end. Downstream end-user production increased, leading to a surge in NdFeB demand. In January-February 2025, end-use demand decreased following the concentrated release in Q4 2024 and the approaching Chinese New Year, with magnetic material enterprises reducing their operations. From April to July 2025, exports plummeted due to export controls. Additionally, May is a traditional off-season, and magnetic material enterprises took fewer orders due to end-use demand, resulting in lower supply. As end-use demand recovered in June, the supply-demand gap continued to widen. Starting from August 2025, export license approvals were gradually granted, leading to a rebound in exports. In September, influenced by the end-use market's advance stockpiling for production, demand surged. Review and Causes of NdFeB Price Trends from 2024 to 2025 Taking 52UH as an example, as of December 31, 2024, the price of 52UH blanks was reported at 390 yuan/kg, up 25 yuan/kg from 365 yuan/kg at the beginning of the year, representing a 6.8% increase. As the most widely used blank grade in NEVs, the price of 52UH is influenced by end-use supply and demand and raw material prices, showing an overall upward trend. However, under the impact of the export control policy announced in April 2025, export orders decreased significantly, causing prices to pull back. With the implementation of policies and the increase in end-use demand, it is expected that prices will rise slightly in the later period. Outlook for Rare Earth Development Trends in 2025 Demand Side: 1. Affected by export control policies, the exports of rare earth permanent magnets have significantly decreased. Despite the sequential approval of export licenses, it will be difficult to restore the original export volume in the short term. 2. In 2025, China's NEV industry will enter a critical stage of high-quality development, with significant breakthroughs expected in industry scale, technological innovation, market penetration, and other aspects. 3. In 2025, new installations of wind power will continue to grow due to the influence of green transformation and low-carbonization. However, due to technological iterations in raw materials, the demand for NdFeB in onshore wind power projects will decrease. Nevertheless, with the development of offshore wind power, the demand for NdFeB will surge. In the long run, it will remain the main driving force for the sustained growth of rare earth demand. 4. In 2025, the home appliance industry will show a positive development trend driven by the recovery of market demand, technological innovation, and policy support, leading to a continuous increase in the demand for NdFeB. 5. In 2025, energy-saving elevators will be affected by adjustments in the real estate market, but the demand for elevators in infrastructure, industrial sectors, and the installation of elevators in old residential communities will increase significantly, resulting in a relatively small decrease in the demand for NdFeB. 6. In 2025, with the recovery of the mobile phone industry and technological innovation, the increase in mobile phone market demand will drive the expansion of capacity and technological progress in the rare earth industry. 7. The application of humanoid robots in manufacturing, healthcare, services, security, and other fields continues to expand, and is expected to become a new growth point for rare earth downstream demand. This trend will become more pronounced in 2025 and the coming years. Supply Side: 1. The rare earth mining quotas for 2025 have not yet been issued. Affected by export control policies and combined with the current market situation, it is expected that the mining quotas for 2025 will remain flat YoY. 2. The implementation of the "Administrative Measures for the Regulation of Total Rare Earth Mining and Smelting and Separation" and the "Administrative Measures for the Traceability of Rare Earth Product Information" will enhance the transparency of the circulation of rare earth products. Additionally, for the first time, overseas rare earth ores will be included in the smelting and separation quotas, facilitating macroeconomic regulation. The smelting and mining quotas will increase. 3. Affected by export controls, the exports of rare earth permanent magnets are restricted. However, driven by the increase in domestic end-use market demand, the production of NdFeB will increase, and the production of NdFeB in 2025 will increase slightly. 》Click to view the special report on the 2025 SMM (2nd) Rare Earth Industry Forum