Executive Interviews

Asian Metal: Welcome to Asian Metal’s interview, Mr. Wu. Please introduce your company and business briefly.

Mr. Wu: Our company focuses on the production and sales of rare earth metal and alloy, as well as the 55hydrogen storage material. Our main products are PrNd mischmetal, cerium metal, ferrogadolinium 73% and hydrogen storage material. We own an annual production capacity of 3,000t, including 500t of hydrogen storage material.

Asian Metal: The Chinese PrNd mischmetal mainstream prices showed downtrend in general from early 2022. The current mainstream prices recorded RMB880,000-890,000/t (USD129,712-131,186/t) EXW T/T 30 days, a decline of 16% from the beginning of 2022. What do you see as the major reason of the sliding prices?

Mr. Wu: In my opinion, the first reason is that China’s PrNd mischmetal export volume declined this year as a result of the sluggish global economic. According to the data of China Customs, China’s rare earth export volume in 2022 declined to around 48,728t, down by 2,030t YoY. Secondly, the demand from domestic Chinese consumers softened as NdFeB magnet application industries were inactive and some end users reduced consumption volumes by technological reformation. In 2022, NdFeB magnet consumption from consumer electronics industry slid by around 20% YoY. Most of Chinese wind turbine producers finished technological reformation successively in 2022. Before they improved the technology, they need to consume around 250t of PrNd mischmetal in the production of each GW of offshore wind turbine. While they succeeded in reducing PrNd mischmetal consumption by more than 50% for each GW of offshore wind turbine production after changing the technology, which dragged the NdFeB magnet demand in 2022.

Asian Metal: Some Chinese NdFeB magnet producers consumed ferrogadolinium 73% as a substitute for 3-5% of PrNd mischmetal in the production of NdFeB magnet in order to reduce production costs. How about the current ferrogadolinium 73% demand in domestic market?

Mr. Wu: Yes, some Chinese NdFeB magnet producers replace 3-5% PrNd mischmetal by adding ferrogadolinium 73%. The current ferrogadolinium 73% market also sees weak demand. There are around 12 major ferrogadolinium 73% producers in China with an annual production capacity of 6,000t. Their output in 2022 recorded about 3,500t due to insuffcient demand as far as I know.

Asian Metal: What’s your prediction of Chinese ferrogadolinium 73% price trend in the coming two months?

Mr. Wu: The Chinese ferrogadolinium 73% price trend always follow that of PrNd mischmetal. The Chinese ferrogadolinium 73% prices rose by around RMB10,000/t (USD1,474/t) to about RMB425,000/t (USD62,645/t) EXW T/T 30 days in January 2023. In view of buyers’ wait-and-see attitudes, the Chinese ferrogadolinium 73% prices would show downtrend in general in February and March.

Asian Metal：The majority of NdFeB magnet producers also turned to cerium metal rather than ferrogadolinium 73% as the substitute to replace around 10% of PrNd mischmetal in the production of middle and low performance NdFeB magnet products in order to decrease production costs. How about the supply and demand of Chinese cerium metal now?

Mr. Wu: The Chinese cerium metal market sees oversupply at present. There are around 10 major cerium metal producers in China with an annual production capacity of 20,000t. While China’s cerium metal consumption volume was only around 50% of the production capacity in 2022. Dragged by furious competition among sellers, they had difficulties in concluding deals.

Asian Metal: How do you predict the Chinese cerium metal price trend in February and March of 2023?

Mr. Wu: As far as I know, most of Chinese smelters reduced or halted cerium metal production in Q4 of 2022 due to heavy stocks and low prices. Chinese producers’ cerium metal production costs hover at around RMB25,000/t (USD3,685/t) now, which stay close to the current market prices. It suggests that Chinese cerium metal producers already have difficulties in gaining margins at current price levels. Therefore, I predict that the Chinese cerium metal prices don’t have room to go down and would show stable trend in February and March.

Asian Metal: How do you predict the demand and price trends of PrNd mischmetal in February and March of 2023?

Mr. Wu: As consumers purchased actively before and after the Spring Festival holiday, the Chinese PrNd mischmetal market saw rising prices in January 2023. The mainstream prices recorded RMB895,000-900,000/t (USD131,923-132,660/t) EXW T/T 30 days in late January 2023, up by RMB30,000/t (USD4,422/t) MoM. Dragged by reduced orders and pessimistic attitudes towards the demand outlook, most NdFeB magnet producers held wait-and-see attitudes towards the Chinese PrNd mischmetal market. Therefore, I foresee dropping prices in the Chinese PrNd mischmetal market in February and March.

Asian Metal: How do you think about the Chinese PrNd mischmetal demand in 2023?

Mr. Wu: I believe the Chinese PrNd mischmetal demand would increase in 2023 as a whole. The international economy is expected to improve in 2023 and the demand from international consumers would pick up gradually this year. China’s PrNd mischmetal consumption volume in 2022 was around 60,000t and I believe it would grow in 2023.

Asian Metal: What do you see as the major challenges that Chinese smelters are facing? How do you plan to cope with them?

Mr. Wu: Chinese smelters are facing challenges of low operating rates and price inversion caused by tight rare earth oxide supply and furious competition among smelters. Given above challenges, we focus on the research, development, and improvement of advanced materials in order to increase rare earth metal product diversification and to enlarge market share of current rare earth metal products.

Asian Metal: Thanks for your excellent sharing! Wish your company further success!

Mr. Wu: I wish Asian Metal a prosperous business.