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.

The market bottomed out yesterday, with the three major indices showing mixed changes. The total trading volume of the Shanghai and Shenzhen stock exchanges for the day was 1.08 trillion yuan, a decrease of 200.3 billion yuan compared to the previous trading day. In terms of sectors, beauty care, e-commerce, food, and banking led the gains, while duty-free, ports, Hainan, and rail transit sectors led the declines. As of yesterday's close, the Shanghai Composite Index rose 0.15%, the Shenzhen Component Index fell 0.27%, and the ChiNext Index fell 0.13%. At today's brokerage morning meetings, China Securities suggested that the rare earth sector is both offensive and defensive, recommending active attention; Huatai Securities stated that the AI healthcare industry trend is accelerating; CICC believes that the total telecom capital expenditure in 2025 will be under pressure, with attention on structural growth opportunities such as computing power and 5G-A. China Securities: The Rare Earth Sector Is Both Offensive and Defensive, Recommend Active Attention China Securities stated that recently, two ministries issued an announcement on export control measures for seven types of medium-heavy rare earth-related items, including samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium. Driven by both export control policies and the release of end-use demand, downstream performance has been strong, with increased procurement activity pushing prices slightly higher. Trump's aggressive tariff policies, combined with China's control of about 70% of global rare earth mines, about 90% of rare earth smelting and separation, and about 90% of rare earth magnet capacity, give China a complete industry chain and strong self-control capabilities. The introduction of dual controls on production and exports provides a strong countermeasure to US tariff policies. On the demand side, rare earth magnets are essential materials for high-performance, energy-efficient motors. A single humanoid robot uses over 2kg of rare earth permanent magnets, comparable to the amount used in a NEV. Musk predicts that the demand for humanoid robots will reach the level of 10 billion units in the future, far exceeding the demand for NEVs, indicating a very broad future space. The rare earth sector is both offensive and defensive, and active attention is recommended. Huatai Securities: The AI Healthcare Industry Trend Is Accelerating Huatai Securities stated that on April 10, the US FDA announced a series of methods to reduce, improve, or replace animal testing requirements in the R&D of monoclonal antibody therapies and other drugs, including AI-based toxicity calculation models and cell line and organoid toxicity tests conducted in laboratory environments. A pilot project is planned to launch in 2025, allowing some pharmaceutical companies to completely skip animal experiments under FDA supervision, with a full policy update expected to be completed by 2026. This FDA policy will further promote the coverage of AI in new drug development, accelerating from chemical synthesis to preclinical and clinical trial biological stages, driving innovative drug companies to increase investment in AI drug discovery platforms. It is reiterated that 2025 will see a leap in "AI + healthcare," and related investment opportunities should be valued. CICC: Total Telecom Capital Expenditure in 2025 Under Pressure, Focus on Structural Growth Opportunities Such as Computing Power and 5G-A CICC stated that the 2024 financial reports of the three major telecom operators show that their total capital expenditure for 2024 was 318.9 billion yuan, down 9.7% YoY, a decline higher than the 4.5% guidance at the beginning of 2024. Looking ahead to 2025, the total capital expenditure guidance for the three operators is down 9.1% YoY to 288.9 billion yuan, with the investment scale continuing to narrow. Structurally, the investment focus of operators is further tilting towards computing power networks, with China Mobile/Telecom/Unicom guiding computing power investments up 0.5%/22%/28% YoY, while traditional mobile & fixed network construction has entered a period of high-quality and steady development focusing on investment efficiency. Future upgrades in 5G-A, 400G OTN, and 50G PON are expected to boost incremental investment in wireless/wired networks.

【SMM Analysis：Mobile phone shipments are up YoY, and the price of its raw material Co3O4 is difficult to rise or fall】The domestic mobile phone market operation analysis report for July 2024 released by the China Academy of Information and Communications Technology shows that in July 2024, domestic mobile phone shipments reached 24.204 million units, up 30.5% YoY.

The State-owned Assets Supervision and Administration Commission of the State Council (SASAC) said at a press conferences that it will strengthen the ability to support important energy resources, fully promote domestic exploration of important energy and mineral resources, increase reserves and production, and promote the diversification of oil and gas resource imports.

Chinese autonomous driving tech company MINIEYE announced on Feb.17 its successful delivery of an L4 autonomous minibus project in Suzhou, Jiangsu Province.

Polaris Energy Storage Network learned that the supporting 100MW/200MWh ESS project for the 1,000MW PV power generation composite project in Shizuishan City by Ningxia Xinghai New Energy Co., Ltd. has announced the winning candidates for the PC project. The first winning candidate is China Railway 11th Bureau Group Co., Ltd., with a bid price of 1.1598 billion yuan, equivalent to a unit price of 0.58 yuan/Wh. The second winning candidate is China Construction Third Engineering Bureau Group Co., Ltd., with a bid price of 1.1670 billion yuan, equivalent to a unit price of 0.584 yuan/Wh. The third winning candidate is PowerChina Beijing Engineering Corporation Limited, with a bid price of 1.1692 billion yuan, equivalent to a unit price of 0.585 yuan/Wh. The bid inviter is Ningxia Xinghai New Energy Co., Ltd., and the construction site is located in Hongyazi Township, Pingluo County, Shizuishan City. The project involves the construction of a new 100MW/200MWh ESS power station, with the main construction content including the installation of 20 sets of 5MW/10MWh liquid-cooled ESS units. Each 5/10MWh liquid-cooled battery system consists of battery modules, combiner cabinets, BMS systems, temperature control systems, and fire protection systems. Each 10MWh ESS unit includes 24 battery clusters, with each cluster containing 4 battery modules, and the battery modules are formed by 1P104S battery cells.

Hall displaying electric cars at the ongoing Shanghai Auto Show (April 18-27) is a key battleground, as car makers are racing to catch up with Chinese competitors in the EV market.

Yitong Century announced that the company has been selected as the winning bidder for the Guangdong Unicom comprehensive maintenance 5G procurement project for 2025-2026. The project services include comprehensive maintenance, government and enterprise installation, relocation, and repair services across 8 specialized maintenance areas, as well as Guangdong Unicom line and supporting facility renovation services. The total scale of awarded bids amounts to 148 million yuan (excluding tax), with Section 6 in the non-construction area accounting for 14.00% of the bid, amounting to 69.7 million yuan, and Section 5 in the construction area accounting for 15.61%, amounting to 78 million yuan. This selection aligns with the company's business development plan. If a formal contract is signed and successfully implemented, it will have a positive impact on the company's future business growth and further expansion in Guangdong.

BAIC Group and China Mobile Group Beijing Co., Ltd. (Beijing Mobile) signed a strategic cooperation agreement on December 7 in areas such as cloud-based new infrastructure services and enterprise digi...

On September 5, the Ministry of Industry and Information Technology and the Ministry of Finance jointly issued the Action Plan for Steady Growth of the Electronic Information Manufacturing Industry in 2023-2024.