Guotai Junan Securities: Rare earth smelting assets may be revalued quickly, focusing on mid-heavy rare earth smelting separation enterprises.

Guotai Haifu Securities stated that the Ministry of Industry and Information Technology, the National Development and Reform Commission, and the Ministry of Natural Resources recently released the "Interim Measures for the Total Control and Management of Rare Earth Mining and Rare Earth Smelting and Separation." Compared to previous policies, the main changes include: refining the total control management of smelting and separation, incorporating imported ores into supervision, strengthening supervision granularity and traceability mechanisms, establishing a penalty system for overproduction, and adding market feedback and dynamic adjustment mechanisms. With the upcoming peak season for new energy vehicles, domestic and foreign companies have strong demand for replenishing stocks, driving recent accelerated increases in rare earth prices. After the implementation of this management measure, there will be strong catalysis on both the supply and sentiment sides, and the driving force for the increase in rare earth prices is still strong. The sector is expected to continue to perform well, with a focus on medium and heavy rare earth smelting and separation enterprises.