The increase of rare earth permanent magnets has an impact on permanent magnet variable frequency air compressors
Since the beginning of this year, the price of praseodymium and neodymium oxide has risen by more than 45%, and the price of rare earths has risen. The impact on the downstream manufacturing industry that uses rare earth permanent magnets as raw materials is self-evident.
The rapid increase in the price of rare earth permanent magnets is closely related to the gradual progress of the rare earth crackdown in China and the second batch of total rare earth production control plan issued by the Ministry of Industry and Information Technology recently. Six companies including China Minmetals Corporation, Aluminum Corporation of China, and Xiamen Tungsten have all set targets for total volume control.
The notice reiterated that rare earths are products that the country implements total production control and management, and no unit or individual must produce unplanned or over-planned production. The notice stipulates that after the six rare earth group companies are located in the provincial (regional) industrial authority, they will decompose the plan issued by the Ministry of Industry and Information Technology to the relevant enterprises before July 15 and report to the Ministry of Industry and Information Technology and the provincial (regional) industrial authority. For the record, the distribution rights of the plan shall not be delegated.
The Ministry of Industry and Information Technology has tightened the control of rare earth resources, and most upstream buyers are on the sidelines. They are more optimistic about the market outlook. In addition, the recent decline in the operating rate of waste recycling companies has caused the supply of rare earth oxides to shrink, and the market outlook continues to rise.
Rare earth permanent magnet prices rise, affecting permanent magnet inverter compressors
The larger user of neodymium praseodymium oxide is neodymium iron boron permanent magnet materials. Rare earth permanent magnets are important raw materials for permanent magnet inverter compressors and permanent magnet motors. The core component of the permanent magnet inverter compressor is a permanent magnet motor, and the essential part of a permanent magnet motor is magnet steel. The production of magnet steel needs to add rare earth materials such as neodymium iron boron to increase the magnetic properties of the steel.
When the market for permanent magnet inverter air compressors and motors is booming, rising prices of important raw materials will undoubtedly bring cost pressures on permanent magnet compressors and motors. With the advancement of the country's protection of rare earth resources, the completion of the integration of the six major rare earth groups and the gradual advancement of rare earth hacking, the bottom range of rare earth prices has been established, and the price of rare earth permanent magnets may continue to rise in the future.
As the price of raw materials rises, the profit margin has become narrower for compressor companies that do not have much profit margins. At this time, companies that have already transformed and started producing permanent magnet inverter compressors and permanent magnet motors must consider production costs and take countermeasures. Companies that are preparing to transform and produce permanent magnet products must also carefully consider whether they will transform at this time. It's a better time.
Of course, other possibilities are not ruled out. With the improvement of my country's exploration and mining technology for marine rare earth resources, the output of rare earth resources increases, and the price of rare earth permanent magnets may drop. In addition, there are spectators in the upstream of rare earth permanent magnets. They are waiting for the price of rare earth permanent magnets to continue to rise. When the price fluctuates downwards, they may increase the supply and reduce the price of rare earths to some extent.
Companies that use rare earth permanent magnets as raw materials can increase the utilization of rare earth permanent magnet resources through technological innovation or appropriately adjust the prices of permanent magnet products to broaden their profit margins and respond to changes in the market price of rare earth permanent magnets. The impact of rising rare earth permanent magnet prices on permanent magnet compressor products is relatively lagging. Enterprises that plan to purchase or introduce permanent magnet inverter compressors should also plan ahead and make early plans to respond to future market changes.