SHANGHAI, Jun 1 (SMM) - Under the background of "carbon peaking and carbon neutrality", downstream applications such as industrial motors, new energy vehicles, and wind power generation have developed rapidly, and the market demand for high-performance sintered NdFeB permanent magnet materials has continued to grow. The automobile industry is one of the main industries for the application of magnetic materials. Traditional automobiles and new energy vehicles together account for about 50% of the magnetic material application market. The application prospects of new energy vehicles are very promising.

At present, there are more than 200 magnetic material production enterprises in China, most of which have an annual output of less than 2,000 mt, while companies whose annual output exceeds 10,000 mt are mostly listed firms.

 Affected by severe pandemic in Shanghai and its surrounding areas in April and May, the demand in the new energy vehicle industry weakened. Large-scale magnetic material factories were supported by long orders, while some small and medium-sized magnetic material factories reported poor shipments.

Falling orders forced some small and medium-sized magnetic material factories to reduce their production by 40-50%. The decline in operating rate of magnetic material companies resulted in a reduction in scrap output. The tight supply of scrap and high prices increased the cost of rare earth separation enterprises. Some rare earth separation enterprises reduced production, and the production of praseodymium- neodymium oxide declined.

 In May, despite production resumption in NEV industry, demand did not improve significantly.

 From June 1, Shanghai has gradually lifted its COVID lockdown, allowing enterprises to resume work and production in an orderly manner. In order to promote consumption, Shanghai has also introduced a subsidy policy for buyers who sell their old cars while buying new energy vehicles.  

At present, the rare earth separation plants and metal plants are holding offers firmly due to cost support and tight supply. In addition, the demand is expected to pick up. As such, the quotations of praseodymium- neodymium rose. Mainstream prices of praseodymium-neodymium oxide and praseodymium-neodymium metal were 950,000-955,000 yuan/mt and 1.15-1.165 million yuan/mt respectively. Some industry players are optimistic about rare earth prices after the Dragon Boat Festival.

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