Japan's transfer of production to China will aggravate rare earth battles between Chinese and foreign companies

The rare earth war has been a long-standing issue, and it has recently returned to full swing. What is different this time is that Japanese manufacturers who are worried about China's restrictive rare earth export quotas have begun to transfer production to China.

Correspondingly, in the “12th Five-Year” development strategy of the newly emerging strategic emerging industries, the specific requirements for the new materials industry are: By 2015, the self-sufficiency rate of key new materials will increase to 70%, and among them, rare earths The permanent magnet will be an important part of it. This means that Chinese and foreign companies will set off a rare earth battle in the future.

This year, major Japanese rare earth prices have risen more than five times, and Japanese manufacturers worried about China's restrictive rare earth export quotas have begun to shift production to China.

Reuters reported that Japan's major rare earth alloy producer Showa Denko recently announced that its Chinese joint venture's production will increase by 50% to 3,000 tons per year; Hitachi Metals also began to consider the production of neodymium magnets to China and the United States.

The market expects that no other country except China will supply large amounts of rare earth before 2013, so Showa Denko and Hitachi Metals may indicate that technology manufacturers have moved out of Japan in large numbers.

According to Lu Ming, Rare Earth Analyst at Baichuan Information, the reason behind the transfer of Japanese capital to China is because China’s rare earth reserves rank among the top in the world. As of the end of 2010, the world's rare earth reserves were 99 million tons, of which China's reserves were 36 million tons (36% of the total). In 2009, the output was 120,000 tons, accounting for 97% of the world's total production. Rare earth magnets are mainly used in hybrid vehicles and electric vehicles.

As a major country with rare earth reserves, China’s understanding of rare earth strategic resources has undergone a long-term process. Its price changes were also initially reflected in the first half of this year. The price of major rare earths has risen more than 5 times since the beginning of the year.

Baotou Steel Rare Earth is a representative of northern rare earth. According to its mid-year report, the revenue growth of rare earth functional materials has reached 374.29% year-on-year. At the same time, the growth rate of gross profit of each main business is greater than the growth rate of income, and basically reached more than two times, while the gross profit growth rate of rare earth functional materials is 2.5 times that of income growth, an increase of 936.36% year-on-year.

In addition, Baotou Rare Earth will set up a joint venture company in Anhui to build an annual output of 4,000 tons of neodymium iron boron rapid solidification thin strip alloy project, after the completion of the company's rare earth magnetic material production capacity will reach 19,000 tons.

It indicates that Baotou Steel Rare Earth has taken the deepening of the industrial chain as the focus of future development, and has entered the fields of neodymium-iron-boron magnetic materials, rare earth permanent magnet resonance imaging, polishing materials, and nickel-metal hydride batteries and other rare earth deep processing.

Guotai Junan analyst Wei Xingzhao said that in the context of a powerful country with strong science and technology and economic transformation, the state limits the export of rare earths and encourages the rapid development of new rare earth materials and rare earth applications. As an important part of magnetic materials, NdFeB magnets have become mainstream products for high-end magnetic materials. China's NdFeB industry accounts for more than 80% of the world's total output, with output exceeding 60%.

China's rare earth map resources war opened the government-led rare earth territory resources war has been opened.

Last month, Chinalco established a rare earth joint venture in Guangxi to lead the integration of the Southern rare earth industry. As the earliest state-owned enterprise entering the rare earth industry, China Minmetals Corporation, it has initially formed an industrial chain from smelting and separation to production of downstream applications. Currently, the separation capacity for smelting and refining has reached 13,600 tons; China Nonferrous Metals Mining Corporation is Guangdong established China National South Rare Earth (Xinfeng) Co., Ltd. and invested RMB 1 billion with Jiangsu Xinwei Group to establish China National Rare Earth Group (Guangdong) Co., Ltd., and plans to build a 17,000 tons annual rare earth separation capacity; Chinalco is in 2011 In June of the same year, it consolidated five rare earth separation companies in Jiangsu and has a production capacity of more than 30,000 tons. In terms of geographical distribution, the distribution of smelting separation capacity of Minmetals, Chinalco, and China Color is relatively decentralized, but the focus of development of rare earth mineral resources is in Jiangxi, Guangxi, and Guangdong, the three major provinces of southern rare earth resources.

The newly established South Rare Earth (Xinfeng) Priority Company is expected to receive 200,000 tons of rare earth resources in Xinfeng County, Guangdong; Chinalco will jointly establish with Guangxi Nonferrous Metals Group and Youzhe Rare Earth New Materials Company in Guangxi in July 2011. China Aluminum Guangxi Guangxi Rare Earth Development Co., Ltd. is expected to become the main enterprise integrating Guangxi rare earth resources.