China's NdFeB magnet output in 2018 to increase significantly

Asian Metal: Thanks a lot for accepting the interview of Asian Metal, Mr. Chen. Would you introduce your company firstly?

Chen: Founded in September of 2011, JinKun Magnetic is located in Dongguan, and is the leading magnet producer in Guangdong. The company owns a complete set of equipments and high quality customer. As the first processing enterprise entered in capital market, the company was listed in Small and Medium Stock Transfer System in November of 2016.

Asian Metal: The Chinese NdFeB magnet industry was oversupplied. The production capacity reached more than 300,000t, but the demand from global market is only around 150,000t. The competition among suppliers is furious. May I know who does your company can survive successfully?

Chen: It's a fact that Chinese NdFeB magnet industry was oversupplied. Jinkun people always try their best to find the suitable clients. We don't offer products that everyone can supply.

Asian Metal: Would you like to introduce your company's development plan?

Chen: After getting a well understanding towards the market demand, our company takes advantage of capital market and unites upstream enterprises to improve rough and finished magnets industries.

Asian Metal: Rare earth prices kept climbing in the first three quarters of 2017 and then declined in Q4 of 2017.PrNd mischmetal prices slid to RMB3935,000-405,000/t in the end of last year, but still 18% higher than the prices of RMB335,000-345,000/t in the beginning of last year. So magnet prices show uptrend in general in 2018.How do you think the PrNd mischmetal price trend in 2018?

Chen: In my opinion, the Chinese NdFeB magnet prices would increase firstly but turn to decline as most of NdFeB magnet downstream industries are inactive. Wind power industry is dim. As the charging piles are not sufficient, the sales of new energy cars doesn't go well.

Asian Metal: What’s your opinion of China's NdFeB magnet output in 2018? Will the output increase YOY?

Chen: I believe China's NdFeB magnet output in 2018 may climb by 40% YOY to 200,000t.

Asian Metal: Chinese PrNd mischmetal suppliers tried to increase PrNd mischmetal prices in February and early March as they believe the market may witness rising buying activities later. But the prices turn to show downtrend over the past two weeks due to consumers' wait-and-see attitudes. What's your opinion about this?

Chen: The downstream demand didn't increase, so I am negative towards PrNd mischmetal prices trend. In my opinion, the reasonable prices for PrNd mischmetal should be RMB380,000-400,000/t D/A 30 days. We would have difficulty in selling magnet if PrNd mischmetal prices increase to higher than RMB400,000/t D/A 30 days.

Asian Metal: Even through PrNd mischmetal prices show uptrend, NdFeB magnet producers usually adopt hand-to-mouth purchasing strategy after 2011. May I know your company's purchasing strategy?

Chen: We always adopt hand-to-mouth purchasing strategy on condition that we have a safety stock. We usually hold around 2 months' inventories.

Asian Metal: What’s do you think is the major problem that Chinese NdFeB magnet industry is facing?

Chen: I think disordered competition is the serious problem Chinese NdFeB magnet industry is facing. We should pay more attention on the productions' quality in order to establish brand in global market, instead of blindly seeking for cheap prices.

Asian Metal: May I know your opinion about Chinese NdFeB magnet industry's outlook?

Chen: In my opinion, Chinese NdFeB magnet producers must to maintain quality and to improve production scale and system in order to stand out in the global market.

Asian Metal: Thanks for your time. Wish your company better development in the future.