The Zhitong Finance App learned that on February 7, the rare earth sector of Hong Kong stocks strengthened. As of press release, China's rare earths (00769) rose 3.57%, Minmetals Resources (01208) rose 2.6%, China Aluminum (02600) rose 1.32%, and Jinli Permanent Magnet (06680) rose 1.71%. Guojin Securities believes that with a decline in supply growth and an improvement in the supply and demand pattern, rare earth prices are expected to bottom up. As rare earth prices rise, resource leaders and growth targets are expected to fully benefit.

According to news, on February 6, the Ministry of Industry and Information Technology and the Ministry of Natural Resources issued the first batch of rare earth mining, smelting and separation total control indicators for 2024. The total control indicators for the first batch of rare earth mining, smelting and separation were 135,000 tons and 127,000 tons respectively. The year-on-year increase was 12.5% and 10.4%, respectively. The total control indicators for rare earth mining, smelting and separation for the full year of 2023 were 255,000 tons and 244,000 tons respectively, up 21.4% and 20.7% year-on-year respectively. The growth rate of domestic supply of rare earths has narrowed this year.

It is worth noting that previously, the Ministry of Industry and Information Technology had emphasized the need to strengthen the application of rare earths. On December 21, 2023, the National Industrial and Information Technology Work Conference was held in Beijing. The conference emphasized consolidating and enhancing the leading position of advantageous industries. Accelerate chain repair and chain extension, and enhance the competitiveness of the entire industry. Support the development of electric exchange models for new energy vehicles, and carry out pilot projects in pilot zones for comprehensive electrification of public sector vehicles. Strengthen regulatory guidance and quality supervision in the photovoltaic industry. Promote high-end applications of rare earths in aerospace, electronic information, new energy, etc. Accelerate the cultivation of emerging industries. Launch pilot projects for intelligent connected vehicle access and road traffic, and promote the development of large-scale Beidou applications and satellite internet.

In terms of market news, on January 2, the Business News Agency published an article stating that domestic rare earth mining volume will increase in 2023. Currently, the country is becoming more and more strict about the regulation of the rare earth industry, prohibiting companies without mining indicators from mining without permission. New energy vehicles are developing more and more rapidly, providing strong support for rare earth market demand, and the domestic rare earth demand gap still exists. The development of the rare earth industry will improve in 2024, reflecting China's determination for long-term green development of rare earths. Rare earth analysts at the business society expect the overall rise in the rare earth market in 2024, and the lowest price may occur in the second quarter.

Debon Securities said that the year-on-year growth rate of the first batch of indicators contracted significantly during the year, and the growth rate of domestic supply of rare earths narrowed throughout the year. The total control indicators for the first batch of rare earth mining, smelting and separation in 2024 were 135,000 tons and 127,000 tons respectively, up 12.5% and 10.4% year-on-year respectively. The total control indicators for rare earth mining, smelting and separation for the full year of 2023 were 255,000 tons and 244,000 tons respectively, up 21.4% and 20.7% year-on-year respectively.

Huaan Securities believes that currently, China's rare earth industry has entered a new stage, and a light pattern has formed in the south, heavy and northern regions, and the rigid increase in supply under the quota system is mainly light rare earths. On the demand side, due to widespread application, rare earth permanent magnets have sufficient growth potential. Rare earth functional materials can be further divided into magnetic materials, catalytic materials, light-emitting materials, hydrogen storage materials, and polishing materials. Among them, China and the global demand for rare earth permanent magnetic materials account for 42% and 25%, respectively. Rare earth permanent magnet materials have become the core functional materials of energy saving, consumption reduction, green and environmental protection. They are essential elements of automation and intelligence, and have broad development space.

Related concept stocks:

China Rare Earth (00769): On December 15, 2023, Yixing Licheng Refractory Materials and Wuxi Xinwei Ceramics (as such sellers); entered into an equity transfer agreement with Yixing Guoye (as the buyer), Yixing Licheng Refractory Materials and Wuxi Xinwei Ceramics conditionally agreed to sell, and Yixing Guoye conditionally agreed to acquire 100% of the shares in Suhai Magnesium Mine in Haicheng City, at a cost of RMB 29.5 million.

Minmetals Resources (01208): Minmetals Resources announced. Looking ahead to 2024, the company predicts that Las Bambas copper production is expected to be between 280,000 and 320,000 tons, which is basically the same as last year's production; in 2024, Dugald River zinc concentrate production is expected to be 175-190,000 tons, up from 2023; and Rosebery's zinc concentrate production is expected to be 50,000 to 60,000 tons in 2024.

China Aluminum (02600): On January 26, 2024, after review and approval at the 19th meeting of the 8th board of directors of the company, the company plans to jointly fund the establishment of China Alcoa Green Advanced Aluminum-based Materials (Yunnan) Co., Ltd. (Tentative name, subject to the name finally approved by the Industrial and Commercial Registration Agency). Among them, the company and China Alcoa High-End Manufacturing invested RMB 288 million and RMB 192 million respectively in cash. After the establishment of the joint venture, the company and China Alcoa Advanced Manufacturing will hold 60% and 40% of the joint venture's shares respectively. The joint venture will become a subsidiary of the company, and its financial results will be consolidated into the company's accounts.

Jinli Permanent Magnet (06680): Jinli Permanent Magnet announced that it will issue no more than 26.895,400 new H shares, of which the controlling shareholder Jiangxi Reed plans to subscribe for no more than 2017.1.65 million shares; the price per share is HK$8.19, which is a 10.38% premium over the previous trading day (26th). A total of HK$220 million was raised to support business development, supplement working capital and repay maturing debts.