Industrial: China's rare earth resources and technology supply side advantages difficult to replace. Enterprises with scarce resource and smelting capacity and quotas may benefit.

Industrial released a research report stating that the domestic supply optimization combined with slow overseas output increase, the advantage of China Rare Earth Resources And Technology in the supply side is irreplaceable. China Rare Earth Resources And Technology reserves and production volume dominate globally, and China Rare Earth Resources And Technology has the advantage of a complete industry chain. With the total quantity control policy implemented domestically, the supply growth of China Rare Earth Resources And Technology may continue to slow down. Although countries like the United States, Australia, and Myanmar have some rare earth mines and refining facilities, the slow release of supply increment limits the global rare earth supply growth. Therefore, in the short term, China still holds a dominant position in the global rare earth supply pattern, and the global rare earth supply growth may slow down under the background of total rare earth control in China. As a result, companies with scarce resource and refining capacity and quotas may benefit. The main points of Industrial are as follows: China has the only complete rare earth industry chain in the world Rare earth resource extraction mainly involves five stages, among which mining and refining and separation are parts of the rare earth raw material supply. Although countries like the United States and Australia have abundant rare earth resources and some rare earth mining and selection capacity, there is currently limited rare earth refining and separation (especially lacking domestic heavy rare earth refining and separation capacity). Currently, only China has a complete rare earth development industry chain globally, and most countries overseas rely on China Rare Earth Resources And Technology for supply. Against the backdrop of continuing economic and trade disputes between China and the United States, the United States seeks to build an overseas rare earth supply chain. China dominates the global rare earth supply China Rare Earth Resources And Technology supply not only has an industry chain advantage but also a numerical advantage. According to USGS data, by 2024, the global rare earth reserves are approximately 90.8845 million tons, with China holding about 44 million tons, accounting for 48.41%; by 2024, the global rare earth production totals approximately 394,000 tons (4.75% increase year-on-year), with China's production at 270,000 tons, accounting for approximately 68.54%; Global rare earth refining and separation capacity hold a share of about 92.3% (data from 2023) by China Rare Earth Resources And Technology. Overall, in rare earth mining and separation stages, China holds an absolute advantage. Therefore, any changes in China Rare Earth Resources And Technology supply will significantly impact the global rare earth market supply. China Rare Earth Resources And Technology supply continues to optimize Built on industry chain and total quantity advantages, China Rare Earth Resources And Technology supply continues to optimize, mainly through three measures: first, the slowdown in total control index growth rate, with rare earth mining and refining and separation indexes in 2024 growing by only 5.88% and 4.16% year-on-year, significantly lower than their respective average growth rates from 2017 to 2024; second, the promulgation of the 2024 "Rare Earth Management Regulations" and the 2025 "Interim Measures for the Total Management of Rare Earth Mining and Refining and Separation," strictly controlling non-index rare earth production and circulation, while including imported ore refining and separation in the total control system, enhancing China's control over global rare earth supply; finally, domestic rare earth companies are integrated into two major groups, China Rare Earth Resources And Technology and China Northern Rare Earth, making the supply structure more centralized and optimized. Considering China's share in the global rare earth supply pattern and continuous optimization of domestic rare earth supply, if there is no significant increase in overseas rare earth supply, the global rare earth supply may tighten. The release of mainstream overseas rare earth production capacity is overall slow Currently, overseas rare earth production capacity is mainly concentrated in the United States, Australia, and Myanmar. The United States relies mainly on the MP mine for rare earth supply, with the mine expected to expand to 60,000 tons by 2026-2027, but with limited domestic refining capacity; Australian rare earth production capacity is mainly operated by Lynas, which owns mature operating mines like Mt. Weld and a refining plant in Kuantan, Malaysia, but the overall production capacity is small and costs are high; Myanmar has overseas rare earth mines with scarce heavy rare earth capacity, but production fluctuates due to regional conditions. Overall, the short-term growth in overseas rare earth supply is limited. Risk Warning: The progress of rare earth refining and separation capacity construction in the United States and Australia exceeds expectations, the release of ore from Myanmar exceeds expectations, and the release of total rare earth control indexes in China exceeds expectations.