Share Prices of China’s REE Materials Companies Skyrocketing in 2019

Feb. 27, 2019

A slew of companies with share prices up over 20% year-to-date

The share prices of more than a dozen rare earth materials companies in China are up 20% or more year-to-date (through February 26, 2019) on the back of strong profits in 2018 and a promising long-term outlook for value-added rare earth materials, such as NdFeB permanent magnets.

NdFeB pricing power high due to tight supply-demand balance

As we highlighted in a recent insight, China’s NdFeB permanent magnet production increased by 5% in 2018 while domestic NdFeB consumption increased by approximately 6%, keeping the market tightly balanced, as evidenced by a rise in prices for all 31 NdFeB grades that we cover in 2018 versus the year prior.

Strong NdFeB export growth and currency tailwinds boosting the value of exports

In 2018, China’s NdFeB exports increased 11% over the year prior, as noted in another recent insight from Adamas Intelligence. This uptick in exports coincided with a weakening of the Chinese Yuan relative to the U.S. dollar (the primary currency of China’s exports), boosting the value of exports at home for China’s major suppliers.

From April through December 2018, the value of the Chinese Yuan dropped 9% relative to the U.S. dollar as a result of the ongoing U.S. – China trade war.

Reduction in REE input costs boosting profitability

While the average price of all NdFeB grades increased in 2018, the input cost of rare earth metals used to produce NdFeB, such as didymium (NdPr metal) and dysprosium, decreased overall, further boosting the profitability of China’s magnetic materials manufacturers.

Rare Earth Recap 2018: Global Production, Trade and Prices

For more information, including a detailed review of global rare earth production, prices and trade in 2018, keep an eye out for an upcoming report from Adamas Intelligence, titled “Rare Earth Recap 2018: Global Production, Trade and Prices”.

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