The tide of new energy vehicles is unstoppable, upstream lithium, cobalt assets have ushered in a mammoth revaluation, this trend is still in the ascendant. We believe that the next revaluation of the new energy vehicle upstream assets will be high grade NdFeB magnets.
On the demand side, with the continuous launch and volume of domestic and foreign automobile enterprises' new energy models, the global production of new energy vehicles is expected to exceed 5 million in 2020, which will bring the demand for high grade NdFeB finished products to 14,000 tons, which is equivalent to the demand for new energy vehicles NdFeB doubled on the basis of 2016.
On the supply side, high-end production capacity is limited, technical barriers are high, and downstream high-end customers have the characteristics of high threshold and high viscosity; On the price side, considering the effectiveness of rare earth black market, the price of rare earth is expected to continue to rise to cover environmental protection and resource costs. The strong cost pass-through ability of high quality flexible magnetic materials and the feature of gross margin pricing will make it benefit from continuous inventory revaluation and single ton profit increase.
Based on the above factors, once the new energy vehicle demand tide comes, Flexible Magnet industry will have a big development, and relevant leading enterprises will embrace significant development opportunities.