Market Outlook: Rare earth prices are expected to remain depressed in Q1 2014 as domestic and overseas demand will remain weak. Nevertheless, prices may rise at the end of Q1, drawing some support from ongoing consolidation in the industry required by the Ministry of Industry & Information Technology (MIIT) and possible stockpiling by the State Reserve Bureau (SRB).

Supply: Names of six major rare earth companies were finalized, and M&As in rare earth industry will continue in 2014.

Demand: Operating rates at permanent magnet producers held around 60% in Q4 2013. The average rate at fluorescent material producers remained low at around 20%. Operating rates at hydrogen storage battery and polishing powder industries averaged 44% and 40%, respectively.

Macro Front: China’s GDP slowed slightly in Q4 2013.

What is Our Focus

- The most complete product coverage in China: from rare earth oxide, rare earth metal to rare earth carbonate and other products

- The price movement and supply & demand of China rare earth market

- The market outlook of China rare earth market

- The impact of macro policies on industry trend



Background

Rare earth, also known as industrial vitamin, is a kind of important strategic mineral resource widely used in military and electronic industries. China is the largest rare earth producer, but China's rare earth was exported at extremely low price few years ago due to disorderly exploration and competition. In recent years, Chinese government has released a series of policies in order to protect rare earth resources and to reasonably explore rare earth resources. In this context, rare earth prices have surged since 2010, totally reversing rare earth's low price trend history.

Current rare earth output in China has approached to the largest output limit set by related authorities. Meanwhile, crackdown on companies that explore rare earth resources disorderly has also restricted rare earth output, leading to insufficient supply of rare earth in the short term. Coupled with speculative investment, rare earth prices maintain robust upward momentum. The above factors will not likely change in the short term, thus SMM expects that rare earth prices will continue to rise in the foreseeable future.



Objectives

In order to help upstream and downstream par ticipants, traders and companies from associated industries better understand rare earth market, SMM launches China Rare Earth Quarterly Report through long-term survey and research. The report covers a wide range products from rare earth oxide, rare earth metal to rare earth carbonate and other products, makes systematic analysis on price movement as well as demand and supply balance of rare earth, and also forecasts rare earth price outlook.