Rare Earth Prices Are Fried, Selling Products Rather Than Selling Resources.

The price of rare earth is rising, reflecting the return of the value of the rare earth industry.

The price of praseodymium oxide increased by 88%. The price of neodymium, known as the barometer of the rare earth market, surged to 130 thousand yuan / ton from the beginning of the year to 260 thousand yuan / ton, or up to 100%.

The price of rare earth is rising, reflecting the return of the value of the rare earth industry.

With the increasing control and control of China's rare earth industry, the profits of small and medium-sized enterprises that have made a big profit have become less and less. The monopoly of rare earth leader has become the biggest winner of the return of rare earth value.

It is reported that because of the sharp rise in the price of rare earth minerals this year, the profitability of the rare earth industry is upside down, and the most profitable one is the upstream enterprises rather than the downstream enterprises with higher added value.

The industry said, "speeding up R & D and investment in deep processing of rare earths, so that the pricing power of rare earths will be captured through the development of high value-added products, which may be the biggest profit point for future rare-earth enterprises. Otherwise, it is difficult to get the pricing power completely based on the limitation of rare earth minerals."

Rare earth price was stir fried

Rare earth is known as "technology metal", its strategic advantages are more and more.

Daily

Rare earth prices waved farewell to the price of cabbage, while China's rare earth enterprises began to taste the sweetness.

The statistics of related data show that in the first half of 2010, the export of rare earth smelting and separating products in China was 20315.6 tons REO (oxidized rare earth), up 64.4% compared with 13991.1 tons REO in the same period of 2009. The export of rare earth smelting and separating products in our country reached 256 million US dollars in the same period, and the increase reached 239%.

In terms of quota free application products, the total export volume of rare-earth permanent magnets in the first half of 2010 reached 6424.3 tons, an increase of 97% compared with 3258.9 tons in the same period in 2009, and the foreign exchange earnings from exports also nearly doubled compared with the same period in 2009.

Resource monopoly brings huge profits

In November 2nd, a rare earth enterprise salesperson in Beijing told the daily economic news reporter that taking rare earth separation enterprises as an example, the basic gross margin is not higher than 5%.

"From the purchase of enriched products to products, and finally to remove labor and costs, profits are maintained at around 5%.

A person engaged in rare earth separation technology in Baotou also said that rare earth separation enterprises have not made much money.

"For the simple separation and electrolysis industry, it is a normal profit margin.

If the enterprise owns the smelting, separate electrolysis, and the integrity of its own industrial chain, it will increase profits, especially when the market is soaring.

However, reporter survey found that at present, large rare earth enterprises rely on national policies to monopolize the sale rights of minerals and primary products, or become a big winner in the rare earth industry.

And some small businesses rely on private digging for the edge ball.

A company familiar with rare earth mining told reporters that many mining enterprises now have their own processing plants.

"For some rare earth enterprises, since the increase of deep processed products and high value-added products invested in scientific research is no more profitable than the direct sale of rare earth ore, it is better to turn to sell resources so that the production cycle of products is short and profits are high."

Song Zhichao, a rare metal analyst at the business community, said.

Compared with the "opportunistic" of small businesses, the profits of big enterprises are much more justifiable.

Reporters interviewed learned that after the merger and reorganization of the rare earth industry promoted the national strategy, the profits of rare earths have gradually shifted to the hands of monopoly enterprises.

Baotou Steel Rare Earth (600111, SH) three quarterly report shows that the third quarter net profit of the company reached 250 million yuan, an increase of 368.67% over the previous year, the net profit of the first three quarters reached 600 million yuan.

The company also forecasts that the net profit attributable to shareholders of listed companies will reach 1200% this year.

It is worth noting that the largest rare earth company in China and even the world has recorded a negative profit growth for 7 consecutive years in listing 13 years.

Rare earth deep processing enterprises will benefit most in the future

For rare earth prices, Song Zhichao told the daily economic news reporter that China's rare earth prices directly affect the international market prices, prices will rise in the next few years, but it is estimated that this year's inflation will not occur.

"The rare earth industry has certain access conditions. There can be no large influx of enterprises in the future. At the same time, the state promotes the merger and reorganization of enterprises to standardize the market price and form a unified pricing power."

Song Zhichao said that this kind of rare earth deep processing enterprises like Zhongke Sanhuan can easily benefit from the trend of rare earth price rise in the future. "Sanke" recently signed a "strategic cooperation framework agreement" with the five metals and nonferrous metals Limited by Share Ltd.