China’s Northern Rare Earth Increases Magnet Production in August

Northern Rare Earth Magnetic Material(NREMM)

China's major producer of light rare earths, Northern Rare Earth (NRE), reported a significant rise in its production of magnetic materials in August. This surge is a direct response to increased demand from key downstream industries, including the new energy vehicle (NEV) and industrial motor sectors. The company's output growth is being driven by technological advancements and upgrades within its subsidiary, Northern Rare Earth Magnetic Material (NREMM).

Technological Advancements Drive Steady Growth

NREMM has seen consistent growth over the past few months, with its magnetic material output projected to exceed 6,000 tons in August. This is a significant increase compared to April, when the output reached a record-breaking 4,000 tons, a 24.9% month-on-month rise in both production and sales.

Moreover, NREMM’s output and sales during the period from January to August increased by 18% year-on-year. This indicates a strong upward trajectory, although specific figures for magnet production and sales for 2023 and 2024 have not been provided.

Aiming for Global Leadership in Magnet Production

NRE has ambitious plans to expand its production capacity. NREMM is targeting an output capacity of 150,000 tons per year for high-performance neodymium-iron-boron alloys by the end of China’s 14th Five-Year Plan (2021-2025). This move will position NRE as a leading global player in the rare earth magnet industry.

In December 2022, NRE formed NREMM by consolidating its four wholly-owned subsidiaries: Baogang Magnetic Materials, Ningbo Zhanhao, Beijing Sanjili, and Anhui Permanent Magnet. This strategic merger is designed to create the world's largest magnet manufacturing plant in terms of production capacity.

Increasing Demand from New Energy Vehicles and Industrial Motors

NRE has highlighted the rapid development in downstream demand as a key factor behind the growth in rare earth magnetic materials. This demand surge is largely driven by the NEV and industrial motor sectors. China's NEV production from January to July totaled 5.914 million units, marking a 29% increase compared to the same period last year. Sales also saw a 31% jump, reaching 5.934 million units during the same timeframe, according to the China Association of Automobile Manufacturers.

Meanwhile, China's industrial motor sector is expected to see its sales revenue rise to 388 billion yuan ($54.67 billion) by the end of 2024, up from 372 billion yuan in 2023 and 329 billion yuan in 2020. These figures reflect the growing importance of rare earth materials in the country's industrial and technological advancements.