On May 21, the three major stock indexes closed higher. Rare earth plate continued to rise, up more than 7% on the whole, and 15 authentic rare earth conceptual stocks such as BeiMing Science and Technology, Minmetals, Shenghe and Resources rose and stopped all the way. More crazy happened in the Hong Kong stock market, China's rare earths rose by 135% in the session, and by the end of the session, China's rare earths rose by 108%.
It is understood that due to Myanmar's export blockade, the imposition of tariffs on American products, and the controlled total domestic mining, the market anticipates that the supply of rare earth is tight and prices are rising, which has become the driving force behind the soaring stock price.
Li Bin, a researcher at Huatai Securities, said that in 2017 and 2018, due to environmental protection verification, some mines were closed down or the grade of resources tended to be exhausted, and there was no warrant for expansion and new approvals. Therefore, importing heavy rare earth ore from Myanmar has become an important supplement in China. However, according to the Asian Metal Network information, from May 15 this year, Tengchong, Yunnan and Myanmar border customs clearance, Myanmar banned all rare earth mining related products exports to China, after the closure of customs clearance will not accept any rare earth related products; and it is expected that customs clearance will be difficult within three months.
Liu Gang, an analyst at Southwest Securities, believes that on May 13, the State Council Tariff Commission decided to raise tariff rates on some products of the US merchandise with a list of $60 billion in tariffs imposed since 0:00 on June 1, 2019. Among them, the list of 25% tariff-added commodities in Annex 1 includes a series of imported mines such as rare earth metal mines imported from the United States. Therefore, it is expected that the price of rare earth from the United States will increase and the quantity of rare earth will decrease.
It is understood that China's rare earth reserves and production rank first in the world. According to the 2018 REO report of the US Geological Survey, the global REO reserves in 2017 are about 120 million tons, while China's reserves are 44 million tons, accounting for 36.67% of the global total reserves. In order to protect domestic rare earth resources, the total amount of rare earth mining has been restricted in recent years. According to the relevant notifications issued by the Ministry of Natural Resources, Ministry of Industry and Information Technology, the first batch of total amount control indicators for rare earth and tungsten concentrate mining in China in 2019 will be issued in accordance with 50% of the 2018 indicators, and a substantial reduction in the amount of rare earth mining will also boost prices.
Extended reading: Ministry of Industry and Information Technology organizes a symposium on Operation Analysis of rare earth industry
On May 21, the Raw Material Industry Department of the Ministry of Industry and Information Technology organized a symposium on the operation of rare earth industry. It listened to the reports of key enterprises and trade associations on the operation of the industry in the first half of the year, analyzed the main problems existing, and put forward suggestions for further work.
The leadership of the Raw Materials Industry Department of the Ministry of Industry and Information Technology asked relevant units to take General Secretary Xi Jinping's visit to Jiangxi rare earth enterprises as an opportunity to firmly promote the smooth operation of the rare earth industry.