Objectively view the impact of rare earth purchase and storage on the market

        In the first half of this year, the price of medium and heavy rare earth products fluctuated and rose due to various factors such as supply and demand fundamentals and purchase and storage expectations. The market's purchase and storage expectations for the year are one of the main drivers of the price trend of high dysprosium terbium and other products.After heavy rare earth prices accelerated upward toward recent highs, domestic light rare earth prices also rose from the bottom in June, which may support heavy rare earth prices to remain high with the expectation of stockpiling in the market.

        Encouragingly, the new energy vehicle market has picked up, boosting the demand for rare earth downstream permanent magnet materials.At the same time, the light rare earth market price continued to rise, the price of praseodymium oxide and praseodymium alloy continued to rise, the light rare earth market recovered.Domestic light rare earth prices have risen by about 6% since June.

        Of course, the domestic heavy rare earth market price remains high, and downstream enquiries increase. In addition to the blocked imports from Myanmar, the domestic heavy rare earth market price remains high, and there is still the possibility of "polarization" in the later stage of the rare earth market.

        Under such circumstances, the market has been rumored that the country will purchase rare earths, increasing the industry's expectations.The expectation of rare earth stockpiling is expected to continue to boost the price of medium and heavy rare earths.Meanwhile, in the purchase and storage plan, medium and heavy rare earths account for a large proportion of annual production, which is expected to have a significant impact on the supply, demand and price of medium and heavy rare earths.

        Based on the 10-year history of rare earth purchase and storage, it is found that the rare earth purchase and storage has obvious periodicity, that is, all the rare earth purchase and storage can be divided into three large cycles from 2010 to 2015, 2016 to 2017, and 2018 to the present, showing the characteristics of "anticipation + commercial reserve + state reserve" cycle.Small period, that is, in each year of the purchase and storage, the purchase and storage situation is similar, showing the cycle characteristics of "expected (+ callback) + purchase and storage execution + purchase and storage completion".

        Since 2018, due to price fluctuations and other reasons, relevant government departments have not carried out rare earth purchase and storage operations.Will this year be the fourth round of rare earth stockpiling?This is bound to give rise to a lot of speculation.If the fourth round of buying and stockpiling cycle can come true, it will undoubtedly form a significant boost to rare earth prices.

        This year is the last year of the 13th Five-Year Plan.According to measure, during the period of "much starker choices-and graver consequences-in", the heavy rare earths in rare earth of reserve the remaining credits dysprosium oxide, terbium oxide accounted for 52% of annual production of 2019 and 190% respectively, and considering the current myanmar to start still heavy rare earths in the import of domestic supply tightening effect, once the purchase plan on schedule, will be to heavy rare earth elements dysprosium, terbium, etc, all have great influence of supply and demand and price.

        Further analysis, if rare earth products are purchased and stored this year, the future price of medium and heavy rare earth products such as dysprosium terbium may remain relatively strong.At present, dysprosium oxide and terbium oxide prices are near the 2019 high, dysprosium oxide and terbium oxide prices in the short term in the current price or the rise of the possibility of moderating, but is expected to be positive in the medium to long term.

        Now relevant government departments are purchasing and storing rare earths, which will send a positive signal to the market and reassure the enterprises. This will be of great benefit to the stability of rare earth prices.

        Of course, we should take an objective view of the impact of rare earth stockpiling on the market.At present, different from the past, many commodity holders and rare earth producers have a certain demand for funds. Although the relevant information about the purchase and storage is constantly updated, the price of heavy rare earth in China has risen sharply in the early stage, and the price has approached the historical high.