NdFeB permanent magnets are currently the most excellent permanent magnets with comprehensive quality
NdFeB permanent magnet is a permanent magnet with excellent magnetic parameters, high cost performance and excellent comprehensive quality, the use of sintered NdFeB magnet can greatly reduce the use of magnetic materials, reduce the volume and weight of the motor, greatly improve the efficiency of electrical energy - mechanical energy, compared with ordinary permanent magnets energy efficiency increased by more than 10%-15%. The accelerated penetration of NdFeB permanent magnets is conducive to energy conservation and carbon emission reduction, in addition to the power consumption in electric smelting, 80%-90% of domestic electricity is consumed by motors; In 2020, the implementation of new energy efficiency standards for inverter air conditioners greatly accelerated the penetration of NdFeB permanent magnets in inverter air conditioners. In the future, driven by the domestic carbon peak and carbon neutrality policies, more fields will raise energy efficiency standards, and the improvement of motor standards will become the most important part.
The carbon neutrality policy will promote the accelerated penetration of NdFeB permanent magnets
NdFeB permanent magnets have obvious advantages in energy saving and will promote carbon neutrality mainly in two aspects. On the one hand, NdFeB permanent magnet motor has high energy efficiency, and its penetration rate will reduce power consumption. On the other hand, NdFeB permanent magnets will help the development of new energy sources, and more than 40% of wind turbines use NdFeB permanent magnets, which will help the development of clean energy; At the same time, the drive motor of new energy vehicles mainly adopts NdFeB permanent magnets, which is conducive to reducing the use of fossil energy and reducing carbon emissions in the future.
New energy vehicles will become the most important demand growth area for NdFeB permanent magnets. 2020 is the first year driven by the marketization of new energy vehicles, production and sales have grown rapidly in the second half of the year, with global sales of 3.24 million units and demand for NdFeB permanent magnets of about 11,500 tons. In the next 5 years, the progress of new energy vehicles will accelerate the penetration stage, and we expect global new energy vehicle sales to increase to more than 15 million units from 2021 to 2025, with a compound annual growth rate of more than 35%; The demand for NdFeB will reach more than 56,000 tons, and the domestic demand will reach 24,000 tons, becoming the most important consumption area of NdFeB permanent magnets.
The current round of rare earth prices rose rapidly from demand in May 2020 to an accelerated rise in February-March 2021; Subsequently, due to the downstream forced by cost pressure, on-demand procurement reduced the purchase volume, resulting in a decline in rare earth prices; At present, the average price of neodymium metal in the country is about 750,000 / ton, with a decline of more than 15%. Rare earth elements account for 60%-75% of the production cost of NdFeB permanent magnets, and the current round of rare earth price increases have led to an increase in the production cost of NdFeB permanent magnets by more than 60%, while the price of NdFeB magnets has only increased by 30%-40%. We believe that rare earth prices may stabilize. China will increase the rare earth mining quota in 2021, and the annual quota growth will exceed 25%, easing the pressure on global rare earth supply. Keeping the price of rare earths at a reasonable level is more conducive to the common and reasonable development of the industrial chain and improving the penetration rate of NdFeB magnets.
NdFeB permanent magnet cost end inflection point
The transmission cycle of rare earth prices to the production costs of magnetic manufacturers is 1-2 quarters, and it is expected that the 1-2 quarters of 2021 will become the stage of the greatest cost pressure for magnetic manufacturers, and the cost inflection point will be ushered in in May-June, so we are optimistic about the profitability of magnetic manufacturers in the 2-3 quarters. At the same time, the stock prices of rare earth magnet manufacturers have maintained a bottom shock since the second half of 2017, and we expect that the stock price is also expected to bottom out as profitability recovers.
Leading enterprises accelerate their seizure of the high-end market
After 2019, rare earth permanent magnet manufacturers will accelerate the construction of high-end production capacity, and the direction of new capacity products is mainly concentrated in high-end aspects such as new energy vehicles and consumer electronics.
We believe that this round of capacity expansion is mainly driven by the increase in demand in high-end applications, mainly focusing on new energy energy
According to our estimates, by 2025, the demand for drive motors for new energy vehicles alone will exceed 40,000 tons/year. Represented by Jinli Permanent Magnet and Zhenghai Magnetics, both of which are actively expanding production capacity in the direction of new energy vehicles, it is expected that by the end of 2022, the production capacity of the two NdFeB blanks will reach 23,000 tons/year and 18,000 tons/year, respectively. Zhongke Sanhuan built a new base in Ganzhou with a production capacity of 5,000 tons/year of high-performance magnets; In 2020, Ningbo Yunsheng will increase its annual production capacity by 4,000 tons/year to 14,000 tons/year through internal technological transformation, and plans to build 7,000 tons/year NdFeB blank production capacity through its own funds, mainly expanding the direction of new energy vehicles; In addition to the initial issuance of shares to raise a production capacity of 1,500 tons/year, the construction of 5,000 tons/year of high-performance NdFeB magnet production capacity in Baotou has been launched.
