The Zhitong Finance App learned that Huafu Securities released a research report saying that due to a significant increase in Myanmar mine imports and rare earth indicators in 2023, superimposed downstream demand is still weak. There are many surpluses of praseodymium, neodymium and dysprosium, and terbium maintained a tight balance. In the short term, it is a low season of demand, with supply increasing due to the release of the third batch of indicators and another increase in imported minerals, and rare earth prices may be further pressured; in the medium to long term, the market is still expected to exceed demand in 24-25, but considering that Myanmar mine imports will decline and overseas production capacity construction is still slow, rare earth prices are expected to stabilize. It is recommended to focus on China's rare earths (000831.SZ) and Jinli Permanent Magnet (300748.SZ).

The main views of Huafu Securities are as follows:

Imported rare earth ores: Myanmar mine imports declined, Malaysian ore imports increased

1) Myanmar mine: Myanmar mine imports in February were 0.23 million tons of REO, -34% month-on-month and -38% year-on-year. In January-February, a total of 0.58 million tons of REO were imported from Myanmar ore, -803 tons of REO/ -12% year on year. 2) US mines: In February, 0.19 million tons of REO were imported from US mines, -14% month-on-month and -33% year-on-year. In January-February, a total of 0.42 thousand tons of REO were imported from US mines, which was -0.29 million tons of REO/ -41% year-on-year. The main reason is that MP has begun its own rare earth smelting, and the amount of US minerals used for its own use has increased.

Oxides: supply is still loose

1) Praseodymium oxide: China's praseodymium oxide production in February was 7,689 tons, +22.5%/-1.9% YoY. In January-February, China produced a total of 15,525 tons of praseodymium oxide, +27.3% /+3329 tons. China's praseodymium oxide production declined month-on-month in February, mainly due to a drop in the operating rate of some enterprises. 2) Dysprosium oxide: China produced 51 tons of terbium oxide in February, +45.7%/-3.8% year on month. In January-February, China produced a total of 104 tons of terbium oxide, +57.6% /+38 tons. 3) Terbium oxide: China produced 51 tons of terbium oxide in February, +45.7%/-3.8% year on month. China's total production of terbium oxide in January-February was 104 tons, +57.6% /+38 tons.

Metals: Praseodymium metal production remained flat, while dysprosium iron and terbium declined significantly

1) Praseodymium metal: China produced 6205 tons of praseodymium metal in February, +21.2%/-0.5% year on month. In January-February, China produced a total of 12,440 tons of praseodymium metal, +22.9% /+2,315 tons. 2) Dysprosium iron: China produced 127 tons of dysprosium iron in February, -12.4%/-4.5% year on month. In January-February, China produced a total of 260 tons of dysprosium iron, -5.8%/-16 tons. 3) Terbium metal: China produced 25 tons of terbium metal in February, +25.0%/-10.7% compared with the same period last month. In January-February, China produced 53 tons of terbium metal in total, +23.3% /+10 tons.

Magnetic materials: NdFeB blank production increased 28.8% year-on-year in February '24

China produced 24,850 tons of NdFeB blanks in February, +28.8%/-3.6% YoY. China's total NdFeB blank production in January-February was 50,640 tons, +38.9% /+14,170 tons YoY. The total export volume of the four types of magnetic materials in February was 5,157 tons, or -34.7% month-on-month; in January-February 2024, the export volume was 13,000 tons, +502 tons/ +4.0% year on year.

Price: As of February 29, 2024, according to the Rare Earth Association, the price of praseodymium oxide was 363,000 yuan/ton, -9.0% from the end of the previous month, -18.1% compared to the beginning of the year; the price of dysprosium oxide was 1,825,000 yuan/ton, -4.9% from the end of the previous month and -27.0% from the beginning of the year; the price of terbium oxide was 5.375 million yuan/ton, -4.7% from the end of the previous month, and -27.6% from the beginning of the year. In February 2024, the listing price of northern rare earth praseodymium oxide was 404,900 yuan/ton, down 48,400 yuan/ton from January; the listing price of praseodymium metal was 502,000 yuan/ton, down 58,000 yuan/ton from January.

Risk warning: Downstream demand falls short of expectations; overseas smelting and separation capacity construction exceeds expectations; development of alternative rare earth materials technology exceeds expectations; the impact of environmental issues exceeds expectations.