[At least six rare earth magnetic material enterprises have been granted export licenses! Industry insiders: It is expected that the increase in rare earth mining quotas this year will be approximately 3.7%] ①As of May 18, Zhongke Sanhuan, Ningbo Yunsheng, Zhenghai Magnetic Material, Tianhe Magnetic Material, Insteel, and Earth-Panda had obtained rare earth export licenses; ②Before the introduction of rare earth export control measures, export orders could confirm revenue within a relatively short period, but now this cycle will be prolonged; ③SMM forecasts that the combined rare earth mining quotas for the two batches in 2025 will reach 280,000 mt, up approximately 3.7% YoY. (Cailian Press)

It has been 45 days since export control measures were implemented on seven categories of medium-heavy rare earth-related items, including samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium. A reporter from Cailian Press learned from the industry that at least six enterprises have already obtained the export licenses for dual-use rare earth substances (hereinafter referred to as "rare earth export licenses") issued by the Ministry of Commerce. Additionally, the approval process for rare earth export licenses of several publicly listed firms is continuously progressing. As of May 18, enterprises that have obtained rare earth export licenses include at least six rare earth magnetic material enterprises, such as Zhongke Sanhuan (000970.SZ), Ningbo Yunsheng (600366.SH), Zhenghai Magnetic Material (300224.SZ), Tianhe Magnetic Material (603072.SH), Instar (301622.S), and Earth Panda (688077.SH). In addition, the rare earth export licenses of companies such as China Northern Rare Earth (600111.SH), Guangsheng Nonferrous Metals (600259.SH), and Yinluo Hua (000795.SZ) are currently under application. Due to restrictions imposed by policies, market conditions, production and transportation factors, the supply of rare earths on the supply side may experience a certain degree of reduction in the short term. However, at the same time, downstream demand has entered the off-season. The industry expects that rare earth prices will not experience significant fluctuations throughout the year. At least six rare earth magnetic material enterprises have obtained individual licenses In April this year, the Ministry of Commerce and the General Administration of Customs jointly implemented export controls on seven categories of medium-heavy rare earth-related items, including samarium, gadolinium, terbium, dysprosium, etc., covering various forms such as metals, alloys, and permanent magnet materials. These seven categories of medium-heavy rare earth-related items have also become the first dual-use substances to be explicitly included in export controls. "As the dominant player in the global rare earth supply chain, China controls approximately 85% of the global smelting capacity. These control measures have directly led to an expansion of the supply gap for medium-heavy rare earths in overseas markets, with significant impacts particularly on key varieties such as dysprosium and terbium," Yang Jiawen, a rare earth analyst at Shanghai Metals Market (SMM), told a reporter from Cailian Press. "According to our understanding, as of late April, the prices of dysprosium and terbium in Europe had already doubled or tripled." Industry insiders told a reporter from Cailian Press that under the current circumstances, all export orders for products containing the aforementioned seven categories of medium-heavy rare earth-related items must be reported to the Ministry of Commerce and can only be exported after approval. According to the "Regulations on the Export Control of Dual-Use Items," the current review period for export license applications for dual-use rare earth items is generally 45-60 working days. "If unexpected situations arise, the period may be longer," a relevant person from Tianhe Magnetic Material told a reporter from Cailian Press. "The first batch of goods that our company has obtained approval for is to be delivered to Volkswagen."Currently, a separate application is required for each "formula." If the content of rare earth elements in the product differs, a new application must be submitted. If there are additional new orders subsequently, they will continue to be queued for application submission," said a representative from Insteel to a Caixin reporter. "According to the announcement on export controls for seven categories of medium-heavy rare earths issued by the Ministry of Commerce and the General Administration of Customs on April 4, our company does have some products containing dysprosium and terbium that fall under the control scope. We have applied for dual-use export licenses as required. The licenses are managed on a one-batch-one-license basis, and secondary use is prohibited. Currently, the company has gradually obtained some licenses, and the relevant processes are progressing smoothly," said a representative from Insteel to a Caixin reporter. A representative from Zhongke Sanhuan also stated to a Caixin reporter that the company submitted applications as soon as the export control measures were introduced. Currently, a small number of orders have been approved, and the export licenses for more orders are still under review. "Applications are submitted order by order, and then approved order by order. If the materials are incomplete, they will be rejected, and the submission process will continue, which will extend the entire application cycle," the representative said. It is worth noting that several publicly listed firms in the rare earth permanent magnet sector told Caixin reporters that due to the approval cycle for rare earth export licenses, the companies' performance in the first half of this year may be affected to a certain extent. "Before the introduction of rare earth export control measures, export orders could confirm revenue within a relatively short period. Now, this cycle will be prolonged, which may affect the performance in the first half of the year," they said. A representative from Ningbo Yunsheng stated that currently, only products containing items related to the aforementioned seven categories of medium-heavy rare earths require review. Products from the company that do not contain the aforementioned seven elements are being delivered normally. It is projected that the increase in rare earth mining quotas this year will be around 3.7%. In addition to the implementation of export controls on seven categories of medium-heavy rare earth-related items, this year's domestic total control indicators for rare earth mining are also capturing the attention of the global market. As of now, the first batch of total control indicators for rare earth mining this year has not yet been issued. In contrast, the first batch of total control indicators for rare earth mining and smelting and separation in 2024 was issued on February 7 last year. This year's first batch of rare earth indicators is thus "three months late." The industry believes that the delay in the issuance of this year's first batch of total control indicators for rare earth mining may be related to factors such as the current complex international situation, weak downstream demand, and the inclusion of imported ore in the scope of indicator management. During a recent live broadcast on SMM's rare earth market trends, Yang Jiawen stated, "Based on an analysis of the current market situation, SMM expects that the combined total of the two batches of rare earth mining quotas in 2025 will reach 280,000 mt, with a year-on-year increase of approximately 3.7%."Among them, the output of rock-type rare earths was 261,000 mt, representing a YoY increase of approximately 4%; the output of ion-adsorption type rare earths was 19,000 mt, remaining flat YoY." In Yang Jiawen's view, since the beginning of this year, the supply of rare earth raw materials has remained tight. Meanwhile, the rise of industries such as humanoid robots and the low-altitude economy has brought new demand to the rare earth sector. This year, the global supply-demand gap for Pr-Nd oxide is expected to be 3,500 mt. The improvement in the supply-demand relationship will further support the rebound in rare earth prices. With the regulation of a series of rare earth industry policies, it is expected that the price fluctuation range of Pr-Nd alloy will be controlled within 100,000 yuan/mt, which will help ensure the stability of the profit margin of Pr-Nd alloy. Supply side, the ion-adsorption ore in Myanmar has resumed production, but it is currently the rainy season, affecting the transportation of Myanmar ore. Suppliers at the ore end have shown a significant increase in reluctance to sell. At the same time, downstream NdFeB enterprises have entered the off-season for taking orders, and metal plants in some regions have begun to shut down furnaces and cut production. It is expected that there will be no significant increase in short-term end-use demand in the near future. Huang Ping, the general manager of Shenghe Resources, stated at the 2024 Annual Performance Briefing held recently that despite recent concerns about overall consumer demand triggered by factors such as tariff hikes, which have led to a slight correction in the prices of major rare earth products, the decline has been limited. With the gradual clarification of policies, the market outlook is expected to improve. The company's capacity utilisation rate for rare earth smelting and separation, as well as metal processing, remains high.

SMM May 6 Report: The significant rise in rare earth spot prices in Q1 drove positive earnings reports for several rare earth companies, including China Northern Rare Earth and China Rare Earth, in the first quarter. The rare earth permanent magnets concept sector performed exceptionally well after the Labour Day holiday. As of 10:53 on May 6, the rare earth permanent magnets concept sector rose by 4.45%. Among individual stocks, Jingyuntong, Shenghe Resources, and Tianhe Magnetic Materials hit the daily limit, Jiuling Technology surged nearly 25%, while Xici Technology, Earth Panda, and others rose over 10%. Guangsheng Nonferrous Metals, Longmag Technology, and Galaxy Magnets were among the top gainers. Market News 【Grinm Advanced Materials: Q1 net profit surged 14,698% YoY】 Grinm Advanced Materials announced that in Q1, it achieved revenue of 1.84 billion yuan, down 18.67% YoY. Net profit attributable to shareholders of listed companies was 67.3847 million yuan, up 14,698.12% YoY. The main reason was the increase in net profit of its subsidiary Grinm Yijin and its holding subsidiary Grinm Rare Earth. 【China Northern Rare Earth: Q1 net profit surged 727% YoY, driven by higher sales volumes and prices of major rare earth products】 China Northern Rare Earth announced that in Q1, it achieved revenue of 9.287 billion yuan, up 61.19% YoY. Net profit attributable to shareholders of listed companies was 431 million yuan, up 727.3% YoY. The main reasons were the year-on-year increase in the average selling price of the company's major rare earth products and the increase in gross profit. Meanwhile, the net cash flow generated from operating activities was 410 million yuan, up 371.14% YoY. Additionally, the production and sales volumes of rare earth oxides, rare earth salts, rare earth metals, magnetic materials, and other products increased in Q1. 【China Rare Earth: Prices of some products in the rare earth market rebounded, turning Q1 net profit around YoY】 China Rare Earth disclosed its 2025 Q1 report on April 28, showing that the company achieved total operating revenue of 728 million yuan, up 141.32% YoY. Net profit attributable to shareholders of the listed company was 72.6181 million yuan, turning around from a loss YoY. Net profit excluding extraordinary items was 66.224 million yuan, also turning around from a loss YoY. The net cash flow generated from operating activities was -119 million yuan, compared to -504 million yuan in the same period last year. During the reporting period, the company's basic earnings per share were 0.0684 yuan, and the weighted average return on net assets was 1.55%. Regarding the increase in operating revenue, China Rare Earth stated that it was mainly due to the rebound in prices of some products in the rare earth market, prompting the company to adjust its sales strategy, thereby increasing operating revenue. Pr-Nd oxide prices rose significantly in Q1 》Click to view SMM Metal Rare Earth Spot Prices 》Subscribe to view SMM Metal Spot Historical Price Trends On May 6, the first trading day after the Labour Day holiday, prices of some rare earth products, including Pr-Nd oxide, rose slightly. The increase in prices of rare earth products such as Pr-Nd oxide in Q1 improved the operating performance of many rare earth companies. Reviewing the price trend of SMM Pr-Nd oxide in Q1, it can be seen that the average price of Pr-Nd oxide on March 31 was 444,500 yuan/mt, up 46,500 yuan/mt from the average price of 398,000 yuan/mt on December 31, 2024, representing a Q1 increase of 11.68%. Comparing the daily average price of Pr-Nd oxide in Q1 2025 (429,605.26 yuan/mt) with that in Q1 2024 (381,646.55 yuan/mt), it can be seen that the daily average price in Q1 2025 rose 12.57% YoY. Looking at the price performance of rare earth carbonate in Q1, the average price on March 31 was 35,950 yuan/mt, up 3,340 yuan/mt from the average price of 32,250 yuan/mt on December 31, 2024, representing a 10.36% increase. The daily average price of rare earth carbonate in Q1 2025 was 34,792.98 yuan/mt, up 3,825.04 yuan/mt from the daily average price of 30,967.24 yuan/mt in Q1 2024, representing a 12.35% YoY increase. Market Sentiment 【China Northern Rare Earth: Total imports of ore significantly reduced this year, further improving the supply-demand relationship】 On April 25, Qu Yedong, General Manager of China Northern Rare Earth, stated at the 2024 Annual Performance and Cash Dividend Briefing that, "In 2025, the total imports of ore will be significantly reduced. Meanwhile, under the stimulus of a series of national consumption policies, consumption orders in key downstream sectors will continue to be released, further improving the supply-demand relationship. This is expected to have a positive impact on the company's product sales and prices." (Financial News Agency) China Securities stated that in 2024, China imported 133,000 mt of rare earths, including 77,300 mt of rare earth metal compounds, mainly from Myanmar, Laos, and Malaysia, and 55,600 mt of rare earth metal ore, almost entirely from the US. Baichuan calculated that the actual conversion of Pr-Nd oxide was approximately 4,500 mt. On the supply side, it is expected that US rare earth concentrate exports to China will stall in 2025, and there is a possibility of tightening rare earth supply in Southeast Asia. Domestically, China is strengthening dual controls on rare earth production and exports. On the demand side, 2025 is the first year of significant demand growth for humanoid robots. The rare earth sector offers both offensive and defensive characteristics, and it is recommended to maintain close attention. TF Securities believes that due to the scarcity of medium-heavy rare earths and their high-end applications, export controls will further solidify China's position in the rare earth industry chain. Currently, it is a time of resonance between the fundamentals and sentiment of the rare earth sector, with the price center of rare earths rising, while equity values have not fully reflected this. Investment opportunities in the sector should be emphasized.

Affected by the news that the Ministry of Industry and Information Technology (MIIT) solicited public opinions on February 19 regarding the "Interim Measures for the Total Volume Control and Management of Rare Earth Mining and Rare Earth Smelting and Separation (Draft for Public Comments)" and other related documents, the spot price of rare earths saw a significant increase on February 20. In the stock market, the rare earth permanent magnets concept sector experienced a notable surge at the opening. As of the close on February 20, the rare earth permanent magnets concept rose by 1.34%. Among individual stocks, Chuangxing Resources hit the daily limit, Zhenghai Magnetic Material rose by 6.1%, Guangsheng Nonferrous Metals increased by 5.59%, while Hanghua Co., Yujing Co., China Rare Earth, Baogang Group, and Ningbo Yunsheng were among the top gainers.

[SMM Newsflash: Prices of Multiple Rare Earth Products Rise, Rare Earth Permanent Magnets Concept Stocks Surge Against the Trend, Guangsheng Nonferrous Hits Limit-Up] According to SMM, some metal plants are restocking and stockpiling ahead of the Chinese New Year, leading to increased market inquiries. Suppliers of oxides have maintained firm offers, and low-priced supplies in the market have tightened. Coupled with the temporary inability of Myanmar mines to resume transportation, this has supported medium-heavy rare earth prices. The actual transaction prices of multiple rare earth products have slightly increased. The rise in spot prices and the market's expectation of continued growth in end-use demand for rare earths in NEVs and other sectors have driven the rare earth permanent magnets concept stocks to rise against the trend. As of the close on January 6, the rare earth permanent magnets concept index rose by 1.21%. In terms of individual stocks: Wolong Real Estate and Guangsheng Nonferrous hit limit-up, while Galaxy Magnets, Jiaozuo Wanfang, Innuovo, and Xici Technology posted significant gains.

The 2023 annual performance forecast released by Shenghe Resources shows: According to preliminary calculations by the financial department, the net profit attributable to the owners of the parent company is expected to be 300 million yuan to 390 million yuan in 2023, down 75.53% to 81.17% compared with the same period last year. It is expected that the net profit attributable to the owners of the parent company after deducting non-recurring gains and losses in 2023 will be 225 million yuan to 315 million yuan, down by 79.80% to 85.57%.