Executive Interviews

Asian Metal: Welcome to our interview, Mr. Bao. Please introduce your company and your main business.

Mr. Bao: Established in May, 2012, Zhejiang Sheensen Magnetics Technology Co. is a high and new tech enterprise focuses on the R&D, production and sales of NdFeB magnet. Till late 2022, our company obtained 43 patents (including 23 invention patents) and our high performance NdFeB magnet products have been widely applied in many industries such as wind power generation, electric vehicles, communication equipment, medical instruments, electroacoustic equipment. Our company has become an industry-leading magnet supplier both in domestic and overseas market. We plan to start construction of the first stage of our productin line of high performance NdFeB magnet with an annual production capacity of 20,000t soon and aim to increase our production capacity by 7,000t in 2024 and to reach a total production capacity of 25,000t in 2026.

Asian Metal: The Chinese NdFeB magnet market witnessed slow buying activities in Q1 of 2023. The majority of Chinese NdFeB magnet plants only run with an average operating rate of around 50%. How about your operating rate in Q1?

Mr. Bao: I agree that the Chinese NdFeB magnet industry did remain inactive in Q1. Our factory still ran with operating rates of 70-80% and produced about 300t of rough magnet a month over the past three months as the demand from our fixed clients from small overseas wind power and motor enterprises and leading companies in domestic new energy industries remained steady.

Asian Metal: How do you evaluate the current Chinese NdFeB magnet annual production capacity and the output in 2022?

Mr. Bao: China’s current NdFeB magnet annual production capacity is expected to reach about 350,000t currently and the output probably achieved around 200,000-220,000t in 2022. In view of the weak demand from consumer electronics and wind power industries, I forecast that the Chinese NdFeB magnet output in 2023 would remain hard to increase or would even slide by around 10% YoY.

Asian Metal: Electric vehicle is widely considered as the primary downstream application of NdFeB magnet. How was the performance of the electric vehicle industry over the past one year?

Mr. Bao: According to statistics of China Automobile Industry Association, the output and sales of China’s EV in 2022 reached 7.058 million and 6.887 million respectively, with sharp increases of 96.9% and 93.4% YoY. In my opinion, the global EV production reached around 10 million in 2022 and the whole industry consumed around 26,000t of NdFeB magnet.

Asian Metal: What’s your prediction of the NdFeB magnet demand from electric vehicle industry in 2023? How it will change YoY?

Mr. Bao: I am confident towards the eletric vehicle industry. I forecast that the NdFeB magnet demand from EV industry in 2023 would increase by 10-15% or 2,600-3,900t YoY to 28,600-30,000t.

Asian Metal: A leading EV company announced that they plan to use new magnets to replace rare earth magnet in their next generation of permanent magnet motor. What’s your comments on this?

Mr. Bao: In my opinion, some electric vehicle producers consider using new magnets to replace NdFeB magnet in their next generation of permanent magnet motor because they worry about the sustainable supply of rare earth magnets. But I believe the application of new technology will take 3-5 years or longer to become commercialized. I believe that NdFeB magnet is and would still be the best choice for most of electric vehicle manufacturers. So far, around 70% and 90% of energy vehicle manufacturers in Europe and China consume NdFeB magnet to produce electric vehicles.

Asian Metal: Besides EV industry, what other industries do you also hold optimistic attitude to?

Mr. Bao: Besides electric vehicle industry, I am positive about the NdFeB magnet demand from new markets including robot. Following the sliding rare earth raw material prices, I also forecast that the demand from wind power industry would recover in the future.

Asian Metal: What’s your prediction of Chinese NdFeB magnet demand outlook in the coming 3-5 years?

Mr. Bao: I hold an optimistic attitude towards the Chinese NdFeB magnet demand outlook in the coming 2-3 years. Although the development of electric vehicle industry didn’t meet participants' expectation, the demand outlook in the long term is still positive. The development of intelligent industry, robot industry, and other related industries would also promote NdFeB magnet market to develop. I believe that the average growth rate would reach 5-10% in the coming 3-5 years.

Asian Metal: The Chinese PrNd mischmetal mainstream prices showed downtrend in general so far in 2023. The current mainstream prices dropped to RMB605,000-615,000/t (USD85,483-86,896/t) EXW T/T 30 days, a decline of 47% YoY. What’s your prediction of the price trends in June and Q3 of 2023?

Mr. Bao: The Chinese PrNd mischmetal mainstream prices showed uptrend in general since H2 of 2020 due to low prices and producers' increasing costs. But the market saw sliding prices since 2022 as a result of abundant supply and weak demand. The prices still showed downtrend in general so far in 2023. Dragged by the continuously sliding rare earth raw material prices, NdFeB magnet consumers were inactive in placing orders in Q1. The sliding rare earth raw material prices also depressed magnet producers’ rare earth raw material stock value. Encouraged by rising PrNd oxide prices caused by reducing supply of waste NdFeB magnet and other factors, the Chinese PrNd mischmetal mainstream prices picked up a bit over the past month. But I think the prices would hover at RMB600,000-650,000/t (USD84,777-91,842/t) EXW T/T 30 days in June 2023. The demand from NdFeB magnet industry would recover in Q3 and the mainstream prices would rise to around RMB700,000/t (USD98,906/t) EXW T/T 30 days then.

Asian Metal: Thanks for your excellent sharing. Wish you every success in your business!

Mr. Bao: Thank you, wish Asian Metal a prosperous future!