Since 2020, the price of rare earths has risen rapidly. The price of praseodymium and neodymium oxide has increased from 257,500 to 600,000 yuan/ton, an increase of 133%; the price of dysprosium oxide has increased from 1.79→2.71 million/ton, an increase of 51%; and the price of terbium oxide has increased from 3.895→ 8.825 million yuan/ton, an increase of 127%.
Rare earth elements account for about 80% of the cost of NdFeB magnetic materials. The upward transmission of rare earth prices to magnetic materials is relatively smooth, and the final upward cost will be borne by end user enterprises. Some investors are more worried about whether the upward price of rare earths will damage end demand. The impact is similar to the negative impact of photovoltaic silicon material to photovoltaic installed capacity.
The cost data shows that the downstream demand is relatively strong. From the perspective of cost ratio, rare earth as an additive material has a relatively low cost. Based on the current prices of 600,000 yuan/ton of neodymium praseodymium oxide and 2.5 million yuan/ton of dysprosium oxide, the cost of rare earth in the wind power sector accounts for about 5.5% If the price of praseodymium oxide and neodymium oxide rises to 1 million yuan/ton, the cost ratio will increase to 9.1%. The cost of new energy vehicles, consumer electronics and other fields will account for less than 1%. And because of the improvement of energy consumption standards, the “ferrite substitution” effect similar to 2011 in the air-conditioning field may no longer exist.
It is estimated that the global sales of new energy vehicles will reach 5-6 million in 2021, which is 8-10 times that of 2015. A single new energy vehicle needs about 3-4kg of magnetic materials. According to our calculations, the demand for new energy vehicles has already accounted for a high level. The demand for high performance NdFeB products is 10%, accounting for 30% of demand increase. Assuming that the sales of new energy vehicles will reach about 18 million in 2025, the demand for new energy vehicles will increase to 27.4%.
This is similar to the impact of new energy vehicles on lithium carbonate from 2015 to 2020, and the demand for new energy vehicles can no longer be ignored. If demand of permanent magnet direct drive in wind power and industrial motors under the "dual carbon" are taken into account, "green power" will occupy an absolute dominant position.
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