Supply of Light Rare Earths - The biggest variable in the supply of light rare earths is the mining quota set by the Ministry of Industry and Information Technology, which has not yet been disclosed for 2025 [3] - Baotou Steel's 2024 annual report indicates a 3.4% increase in rare earth concentrate production for 2025, but overall supply growth is expected to be limited due to export controls on medium and heavy rare earths and a 6.45% decrease in tungsten quotas [3] Demand for Light Rare Earths - In the first half of 2025, China's total production of new energy vehicles increased by 40.61%, with a penetration rate of 44.13% [4] - Wind power installations in China saw a significant increase, with a 104.64% year-on-year growth in new installed capacity during the same period, reaching 26.3 GW in May 2025 [4] Heavy Rare Earths Production - China dominates global rare earth smelting and separation capacity, accounting for approximately 88.56% of the total 407,000 tons (REO) expected in 2024 [5] - It is projected that by 2029, global rare earth smelting and separation capacity will rise to 560,000 tons (REO), with China's share decreasing to 64.17% [5] Strategic Metal Resource Management - China has implemented four rounds of export controls on strategic metal resources in 2023, with an increasing number of metals being controlled and faster implementation times [6][7] - The latest measures have included a broader range of metals, indicating a growing emphasis on managing strategic resources [6][7] Price Trends Post-Export Controls - Historical data shows that export controls typically lead to a short-term increase in metal prices and export volumes before stabilizing [8] - Following the recent export controls on tungsten and medium-heavy rare earth elements, a price increase is anticipated in the coming months as export volumes recover [8] Company Performance Elasticity - An elasticity analysis of four rare earth listed companies indicates that a 1% price increase in rare earth products could significantly impact their performance, particularly for companies focused on ion-adsorption type rare earth mines [9]