Profit Inflection Point of Neodymium Magnets Has Been Established
NdFeB Permanent Magnets Manufacturer China Rare Earth Magnet Limited
As price of rare earth stabilizes, neodymium permanent magnets industrial chain hopefully recovers in a short term. Recently, with government’s intensive regulation for rare earth, price of light rare earth has gradually become stable and price of heavy rare earth has a modest increase. The steady rise of price of raw materials benefits and improves middle manufacturers. Otherwise, financial charges will be produced. Due to strong cost transferable ability of neodymium magnets, cost pricing method can obtain more profit from a larger cake. From analysis of historical stock price, share price of NdFeB permanent magnets manufacturers will commonly jump sharply during the period of rare earth price’s rising.
In Q3, 2014, performance of the four main listed companies recovers steadily. We judge that performance inflection point is expected to be reflected in 2015, with the rise of rare earth price and recovery of downstream demand.
Recover in demand of industry of energy conservation and emission reduction, represented by air-conditioners, probably becomes a factor out of expectation in medium term. After going through a decline, neodymium has comparative advantages, comparing with ferrite. Also, air-conditioner industry possesses the price foundation to reuse NdFeB. In addition, with implementation of new energy and efficiency standard of variable frequency air-conditioners in 2013, neodymium iron boron permanent magnet becomes the essential condition of compressors in air-conditioners. In 2015, reuse of neodymium in variable frequency air conditioners will boost the demand, which possibly leads to a demand going beyond expectation.
The rapid development of new energy cars will stimulate a long-term prosperity of neodymium industry. VCM market, the main downstream application of NdFeB, tends to be saturated. Therefore, core power of future long-term space comes from automobile market. New energy cars, in particular, will largely push the demand o neodymium. It is expected that in 2020 demanding quantity of NdFeB will exceed five tons, of which annual growth hopefully surpasses 60%. New energy cars will bring subversive influence on industry. Besides, under a 4.0 industrial generation, demand of high-end permanent magnets may encounter an explosive growth. A long-term golden period will usher in NdFeB industry.
The two-eight industrial structure manifests strengthening competitive advantages of quality companies. From 2014, magnetic enterprises still continues downturn of last year. The gap between business become lager and there is a huge discrepancy between high-end and low-end products. 20% of enterprises can meet the demand of high-end products, but the rest 80% is closed or goes out of business.
Strategies and Advice of Investment:
With the reuse of magnetic material of air-conditioner compressor businesses, sales volume of magnetic material used in wind power and automobile industry increases sharply. Under the circumstance where price of rare earth steadily rises, high-end neodymium industry encounters a recovery period. China Rare Earth Magnet Limited is benefited from downstream demand, with its reasonable product layout, stays a step ahead in new energy cars, comparing with other manufacturers, which is a beneficiary in this industry. Occupying high percentage in wind power industry, China Rare Earth Magnet Limited has a determined growth, is also a growth-oriented manufacturer, specializing in producing bonded NdFeB magnets , hot-pressed SmCo permanent magnets in the world.
As price of rare earth stabilizes, neodymium permanent magnets industrial chain hopefully recovers in a short term. Recently, with government’s intensive regulation for rare earth, price of light rare earth has gradually become stable and price of heavy rare earth has a modest increase. The steady rise of price of raw materials benefits and improves middle manufacturers. Otherwise, financial charges will be produced. Due to strong cost transferable ability of neodymium magnets, cost pricing method can obtain more profit from a larger cake. From analysis of historical stock price, share price of NdFeB permanent magnets manufacturers will commonly jump sharply during the period of rare earth price’s rising.
In Q3, 2014, performance of the four main listed companies recovers steadily. We judge that performance inflection point is expected to be reflected in 2015, with the rise of rare earth price and recovery of downstream demand.
Recover in demand of industry of energy conservation and emission reduction, represented by air-conditioners, probably becomes a factor out of expectation in medium term. After going through a decline, neodymium has comparative advantages, comparing with ferrite. Also, air-conditioner industry possesses the price foundation to reuse NdFeB. In addition, with implementation of new energy and efficiency standard of variable frequency air-conditioners in 2013, neodymium iron boron permanent magnet becomes the essential condition of compressors in air-conditioners. In 2015, reuse of neodymium in variable frequency air conditioners will boost the demand, which possibly leads to a demand going beyond expectation.
The rapid development of new energy cars will stimulate a long-term prosperity of neodymium industry. VCM market, the main downstream application of NdFeB, tends to be saturated. Therefore, core power of future long-term space comes from automobile market. New energy cars, in particular, will largely push the demand o neodymium. It is expected that in 2020 demanding quantity of NdFeB will exceed five tons, of which annual growth hopefully surpasses 60%. New energy cars will bring subversive influence on industry. Besides, under a 4.0 industrial generation, demand of high-end permanent magnets may encounter an explosive growth. A long-term golden period will usher in NdFeB industry.
The two-eight industrial structure manifests strengthening competitive advantages of quality companies. From 2014, magnetic enterprises still continues downturn of last year. The gap between business become lager and there is a huge discrepancy between high-end and low-end products. 20% of enterprises can meet the demand of high-end products, but the rest 80% is closed or goes out of business.
Strategies and Advice of Investment:
With the reuse of magnetic material of air-conditioner compressor businesses, sales volume of magnetic material used in wind power and automobile industry increases sharply. Under the circumstance where price of rare earth steadily rises, high-end neodymium industry encounters a recovery period. China Rare Earth Magnet Limited is benefited from downstream demand, with its reasonable product layout, stays a step ahead in new energy cars, comparing with other manufacturers, which is a beneficiary in this industry. Occupying high percentage in wind power industry, China Rare Earth Magnet Limited has a determined growth, is also a growth-oriented manufacturer, specializing in producing bonded NdFeB magnets , hot-pressed SmCo permanent magnets in the world.
