Asian Metal: Hello, President Wang! Thank you for accepting this interview from Asian Metal. Could you please introduce your company and your main business briefly?

Mr Wang: Established in January 2017, our company is a high-tech rare earth enterprise in response to the strategic transformation and upgrading of the national "13th Five-Year Plan" for rare earth industry. Our company has a registered capital of 50 million yuan, which mainly engages in R&D, production and sales of high purity rare earth metals and rare earth permanent magnet materials.

Asian Metal: Thank you for your introduction. Would you please give us a brief introduction of your career?

Mr Wang: Since I entered the rare earth industry in 1996, I have been engaged in rare earth business for more than 20 years, during which I have accumulated rich industry experience and channels, thus I have my own opinions and ideas on the market demand and technological development direction.

Asian Metal: Chinese PrNd oxide and mischmetal prices increased rapidly since early this June, what do you think are main factors that drive up the prices? Despite the weak demand in Q2, why did prices continue to rise from mid-April? What do you think about the price trend of PrNd mischmetal in H2 of this year?

Mr Wang: Chinese PrNd products, especially PrNd mischmetal, supply kept tight in the short time; Besides, most smelters still held plenty of PrNd oxide stocks of high costs. As a result, Chinese rare earth smelters had to raise offers and thus the price increased sharply this month.

Since this April, Chinese government make efficient efforts to control the spread of COVID-19 and then downstream enterprises gradually resumed production, so that the demand from end users increased in domestic market.

I believe that Chinese PrNd mischmetal prices still have some room to increase in short term, but the situation of tight supply would not last too long.

Asian Metal: However, for the same period during this H1, Chinese lanthanum metal, LaCe mischmetal and cerium metal prices continuously dropped, why? What are key factors that led the prices to move down? What do you think of lanthanum and cerium series metal product price trend in the coming half year?

Mr Wang: Relatively Speaking, the lanthanum and cerium downstream industries are more monotonous compared with other products. For example, Chinese hydrogen storage alloy demand softens and I estimate about 3,000t of consumption for LaCe mischmetal and lanthanum products this year, which would decrease by around 10% YOY. As for the ferroalloy industry, except for special needs, consumers prefer to use rare earth silicon alloys directly because of low prices, replacing a large proportion of the demand for LaCe mischmetal.

In addition, lanthanum and cerium products are not the rigid demand of national production and life, and thus the industrial recovery is not so urgent.

With the recovery of downstream industries in H2 of this year, I estimate that the market would be promoted to some degree, but it would be unbright as a whole.

Asian metals: As far as I know, your company released the industrialization plan for 5,000tpy of rare earth metals and alloys in this April. How is it going now? Could you please introduce your company's current rare earth metal production capacity construction, production status and future development plan?

Mr Wang: The project has been approved by the Inner Mongolian Autonomous Region. At present, the phase two of the project is proceeding in an orderly manner. Meanwhile, the approval procedures of environmental impact assessment, energy assessment and other assessments are in progress.

Currently, the production capacity of rare earth metals for my company has reached 3,000tpy (calculated with ten months of production within a year), and the current monthly outputs are 100t of PrNd mischmetal, 70-80t of lanthanum metal, 50t of cerium metal, 30t of LaCe mischmetal. In a word, we produced about 260-280t of rare earth metal products per month regularly.

Now profits of rare earth smelters mainly depend on: Firstly, lower costs of raw materials; Secondly, larger production scale in order to reduce costs. Therefore, we plan to implement the 5,000tpy of rare earth metal production lines in the next three years.

Asian Metal: Some new capacities in Baotou city already resumed production in H1 of 2020, what do you think of Baotou's advantages in rare earth metal production? Will these new capacities enhance competition among suppliers? As a new built rare earth metal plant, what measures would you take to meet the industry challenges and promote the development of your company?

Mr Wang: Baotou's advantages in rare earth metal production are as follows: On one hand, Baotou government has adopted many supportive policies for the rare earth industry in recent years; On the other hand, Baotou has sufficient rare earth resources and we already completed industrial chain system and significant cluster effect after more than 40 years' development.

I think the new built production capacities would inevitably promote the industry competition, but at the same time, it would also urge the industry enterprises to improve product quality, upgrade our technology and other aspects, which would put forward higher requirements for the industry.

Therefore, we would increase investment in scientific and technological innovation and the distribution of intellectual property rights, and also ensure strict quality control.

Asian Metal: According to statistics of Asian Metal, China's rough sintered NdFeB magnet producers' average operation rate was less than 60% in May, down by about 10% YOY. As far as you know, what is the status of the NdFeB industry in China at present? As one of the main business segments of Zhongxin Antai, how is your company's NdFeB business now?

Mr Wang: Now most Chinese NdFeB magnet plants operate to normal and the raw material stocks that stockpiled during the epidemic has been almost consumed up. Obviously, most companies' orders decreased to some degree in Q2 caused by the epidemic, However, we believe that with the gradual easing of the epidemic, the industry demand would gradually recover, and then the NdFeB magnet's business would return back to normal and stabilize.

Our company owns a designed production capacity of 8,000t for rough sintered NdFeB. Currently, the construction production capacity for phase one is 2,000t (calculated with ten months of production within a year). The monthly output records about 180 tons. Our company's NdFeB products are mainly used in the electrical industry at the moment, especially in the field of electric bicycles.

Asian metals: How about the impact that the COVID-19 had on NdFeB orders in Q2 of this year? Given the uncertain global epidemic situation, do you think the demand for Chinese rare earth magnetic materials will improve in H2 of this year?

Mr Wang: Due to the epidemic of COVID-19, most NdFeB manufacturers decreased operation rates and I estimated that the orders for the industry decrease by 30-40%YOY. With the easing of the epidemic in H2 of this year, I believe that the NdFeB industry will certainly recover to some degree, and there will be a growth in demand to a certain extent, but it is unlikely for the industry to fully recover to the level before the epidemic or show retaliatory growth.

Asian Metal: At last, would you like to share us some feelings on the enterprise management and administration?

Mr Wang: In terms of enterprise management, we should focus on product quality and establish a good reputation in the industry. In addition, we should improve the long-term adaptability of products to market demands through scientific and technological innovation and layout of intellectual property rights, so as to maintain the advancement of the company's development.

As for the administration, the strongest feeling in recent years is to pay attention to the cultivation of talents in various aspects, establish an effective talent incentive mechanism and improve the sense of belonging, participation and mission of employees. The company is made up by "human" and the career is based on "human", therefore, only by attracting and cultivating the talents can we hope to grasp the development of the company.

Asian Metal: Thanks for your sharing and your support, President Wang! Wish you every success in your business!

Mr Wang: Thanks for your focus on our company and wish you better and better!