NdFeB: A new look in the magnetic material industry
As the core midstream material in the electronic information industry, magnetic materials have strong functionality, wide application and broad market prospects. In the context of the national "Twelfth Five-Year" plan to vigorously develop emerging industries, with the gradual maturity of emerging industrial technologies and the gradual expansion of industrial scale, the magnetic material industry will usher in a gratifying spring.
We are optimistic about the NdFeB industry and believe that the NdFeB industry is in a long-term business cycle, and most of the downstream demand has strong rigidity. We can divide the downstream of NdFeB into three categories: miniaturization demand, energy saving demand and cross demand. Miniaturization demand is basically irreplaceable, energy saving demand is the strongest, and cross demand has a certain degree of substitutability, mainly depending on the product. Is it low-end or high-end?
We divide the optimistic and neutral scenarios to forecast downstream demand. In the optimistic scenario, we estimate that the demand for NdFeB magnet blanks in 11 years will be about 75,000 tons, while the demand for the blanks in the neutral scenario will be about 61,000 tons. According to the national rare earth mining index, the supply of NdFeB will be reduced by more than 30% in 2011. The imbalance between supply and demand is the foundation of the investment logic of NdFeB enterprises.
We judge that large NdFeB manufacturers can smoothly pass on the pressure of rising costs and achieve rapid sales growth while maintaining gross profit margin. On the other hand, we believe that the possibility of a sharp drop in rare earth prices is unlikely. NdFeB companies are expected to enjoy high gross profit per ton for a long time and usher in a period of gold investment.
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