Following the Sept. 8 start of rare earth permanent magnet plate 45 stocks led the gains after the September 14, Rising colored (600259.SH) has ushered in a row, after several strong years, the maximum daily limit price of 48.36 yuan. Meanwhile, the rare earth stocks across the board gains across the board, with color plate rare earth movements led by the strong.

2010 interim report of the company, significant growth in business performance rare earth, good policy depends on the initial success, the rare earth prices continued to rise.

Only, significant positive industrial policy actually behind the chaos in profusion, core profit growth - industry value chain is still a long road layout. As Deputy Secretary-General Zhang Anwen China Rare Earth Association said: "Metal of resources can play depends on the level of China's science and technology content and high-tech applications."

Unabated growth momentum in the supply contract

Rare Earth in China is the world's richest countries, reserves accounted for 53.5% of total world reserves. While heavily polluting industries as the next 3 years will be ordered to tighten the supply of rare earth industry is very hard to have a new smelting and separating rare earth projects under construction, so as to tighten the source of rare earth supply, but demand has not diminished. Japan Securities Research letter show that the global demand for NdFeB in the field to maintain the growth rate around 12% of the electric car with a hydrogen storage alloy powder for 15% of the growth rate by 2014 will reach the world's rare earth consumption 185,000 tons annual compounded growth rate of 9%, to ensure long-term high-margin upstream monopoly.

The current domestic rare earth mining area has basically been the background of several major state-owned enterprises division, rare earth industry, M & A will focus on refining, separation and downstream processing industries.

Currently in the national distribution of Baotou Steel Rare Earth (600111.SH) in the first half operating income of 2.328 billion yuan, up by 157%, basic earnings per share were 0.44 yuan, up by 627%. The profit growth comes mainly from cost control, and outstanding resources. Ping An Securities researcher Xiaoyan Song to the "Investor Report" said: "The policy basically is good point to large enterprises, in the mining value chain continuity and given more preferential policies."

Rising colored 2010 mid-year report shows that only -0.17 per share, cash flow, cash flow, which is far from sufficient colored blocks. Its operating capacity and efficiency of cost control is not ideal. But the company's largest shareholder Rising Nonferrous Metals Group has more copper, tin, tantalum, and other resources, the future of listed companies into strategic arrangements clearer. From the revenue perspective, Rising colored body mass is also small, the growth of income need to increase production quotas, production quotas and the increase is from the mining permit, and this is the company now faced a difficult problem.

Negative cash flow per share was also the color of shares (000758.SZ), the company's explanation is that the company disposed of Huangpu Power Co., Ltd., Sichuan Luzhou, Sichuan xuyong Huangpu Coal Co., have a greater loss of equity issues. Net sale of the two long-term loss of a "cancer" losses, the company earned 31.98 million yuan, up 52.5%. The first half of 1101 tons of rare earth and a profit of 14.5 million yuan, is expected to double this capacity.

Fujian Provincial Government has been clear for the management of the province's rare earth industry chain of Xiamen Tungsten (600549.SH), control two mining permits. In addition, the "Investors newspaper" informed, the company is also a card for new. Its long-term roots in the field of rare earth new materials, industrial added value is expected to form a high growth. Accumulated many years of hard alloy cutting tools products have been recognized downstream, and downstream customers is through joint technical research and development round-about way gradually penetrate the market, with products expected to gradually heavy volume, gross margins will improve significantly.

RE prices collapsed at the policy

Although high-yield, high-end market of rare earth industry has never belonged to China.

2003 to 2008, China's rare earth production increased by 31%, supplied nearly 95% of global demand for rare earth concentrates, compared to 1998, Rare Earth exports grew more than 10 times, but the price has been reduced by nearly 50%.

China has not established similar to the OPEC (Organization of Petroleum Exporting Countries) of rare earth industry organizations, to open the production, opening up its policy of pricing power does not ultimately lead to the control of rare earth hands of Chinese enterprises, and the emergence of overcapacity still exists in Japan large number of enterprises acquired Guangxi, Yunnan area of smuggling rare raw materials or semi-finished products, thus we need the state has adopted a policy to restrict the expansion of production capacity disorder, on the backward production technology, environmental protection and compliance of the enterprises are not comprehensive.

This year the Ministry of Commerce has issued a rare earth export quota for 30,258 tons, sharply higher than 2009 was 19,887 tons, down 40%.

Following the Ministry of Land on August 10 signed a "five southern provinces (regions) 15 City RE development control regional joint action program", the also drawn to light rare earth resources in the northern-based implementation of a similar plan. The State Department officially released on September 6 "on the promotion of corporate mergers and acquisitions advice," Rare Earth named mergers and acquisitions included in the list of key industries.

According to media reports, the concept of rare earth is the beginning of good news already know, the market reaction is somewhat lagging behind now. In fact, as early as 2009, the State issued a rare earth industry, regulatory policies, but it was not in the industry seriously. March 15 this year, Ministry of Land Resources has issued a notice, decided to continue the implementation of mining on the total amount of rare earth deposits and other control and management. "When you see really good-looking, but in fact very difficult to make money, business, or the role of cheap cow."

Other hand, China's rare-earth magnets (neodymium iron boron) production, while high, but mainly concentrated in the electro-acoustic, magnetic and other low-end market; while in the high-end markets such as voice coil motor (VCM), magnetic resonance imaging (MRI ), fan motor vehicle primarily for the areas occupied by Japan.

Japan is the world's value-added application of RE to achieve the highest state, the field of rare earth high-tech accounted for its more than 90% of total consumption, and our earth is mainly used in the traditional areas of application in less than a high-tech fields 50%, especially in the field of rare earth new materials, even such a production in Jiangxi province, has almost no independent intellectual property rights of technology and products.

27 years of rare earth industry in Ganzhou, Jiangxi Rare Earth Mining Co., Lai Siu-tien, deputy general manager, "just control of resources, not fundamentally won the right to speak." The real value lies in applications of rare earth, rare earth and lead our business in this with the Japan, Europe and the United States there is a huge gap.

Japan Securities researcher Wang Huachun letter said: "From the view of the industry chain of China Rare Earth Industry, rare earth resources in the upstream production has matured, the downstream industry chain and the core high-end technology is still in a foreign country."

However, there are companies such as Baotou Steel Rare Earth with the front edge and successful models started to catch up, in 2008 and Australia signed an agreement for technology exchange, and opened four downstream industrial chain.

Zhang Anwen hope: "a large central enterprises to make use of its funds and policy advantages to enter the field of deep processing of rare earth, and there on the Ceric ammonium nitrate and various organic acids such as individual rare earth set the corresponding entry threshold, the protection of this relatively high value-added products, But the relatively small volume market. "

Providing by Xinfeng Rare Earth Magnet from IFENG.COM