Demand for new energy vehicles has begun to explode. The price of rare earths may open up a long bull run.
CITIC has published price forecasts well above those used in the economic studies for Pensana’s Freeport located rare earth processing hub at the Saltend Chemicals Park in Humber, UK.
According to CITIC:
- The demand for new energy vehicles has begun to explode and will become the largest downstream application of rare earths by 2025. Demand from offshore wind and energy saving inverter air conditioners will also continue to increase.
- Under the 14th Five Year Plan, China will restrict mining of its domestic rare-earth resources and apply high pressure to the environmental protection of the ‘Black’ (unregulated) supply side. For the first time on record, it will unify and clarify regulations, greatly increasing penalties for companies that violate them.
- China leads the world in rare earth smelting and separation and has the most complete rare earth industry supply chain. Supply side domestic structural reform has continued to advance and applications such as downstream magnetic materials have developed rapidly.
- New national legislation, The Regulations on Administration of Rare Earths Management, will be promoted as soon as possible to provide for high-quality rare earth industry development, targeting unprecedented heights.
- CITIC predicts a limited increase in Chinese overseas supply in the next five years and that global rare earth supply and demand may be tight for an extended time.
- CITIC has raised its price forecast for NdPr in 2021 to ¥800,000 yuan/tonne (US$125,000)/tonne.