NdFeB magnet demand from automobile industry to keep climbing

Asian Metal: Thanks for accepting our interview, Joanna! Please introduce your company and your main business.

Joanna：Established in 1980, Hangzhou Permanent Magnet Group Co., Ltd. is a comprehensive manufacturer of permanent magnet. We pay close attention to the application of permanent magnet, so we provide not only all kinds of permanent magnet but also design and application assistance services. We own around 750 stuffs now. We celebrated 40th anniversary of our establishment this year.

Asian Metal: The competition among Chinese NdFeB magnet is intense as China's NdFeB magnet production capacity reaches more than 3 million tons while the annual demand records only around 1.5 million tons. Would you please introduce how did your company develop continuously in such fierce competition?

Joanna：Encouraged by the enormous potential of energy conservation and emission reduction as well as automobile industries, Chinese NdFeB magnet manufactures enlarged production capacity in advance over the past years, which resulted in furious competition among Chinese NdFeB magnet makers. The market stratified over the past years. We constantly focus on customers' requirement and provide customized services to our clients regarding product category, performance and so on.

Asian Metal: May I know your development plans in the coming years?

Joanna：We devoted ourselves to enriching product types over the past years in order to provide more suitable solutions to our clients. We produce sintered NdFeB magnet, bonded magnet, Sm-Co magnet and Al-Ni-Co magnet at present. We aim to increase our magnet output by 20% every year in the coming three years. As our key product, our sintered NdFeB magnet output in this year would climb by around 80% YOY. We plan to double the production next year. We plan to maintain Sm-Co magnet output and improve product performance in the coming years. At the same time, we would like to reduce Al-Ni-Co magnet production and focus on the development of customized magnetic business in the coming years.

Asian Metal: Chinese PrNd mischmetal prices climbed by around 29% to RMB537,000-542,000/t (USD81,611-82,371/t) EXW T/T 30 days. Some suppliers increased offer to about RMB600,000/t (USD91,185/t) EXW T/T 30 days. How do you think about Chinese PrNd mischmetal price trend in the coming two months?

Joanna： I believe the supply and demand would play predominant roles in Chinese PrNd mischmetal market. Chinese NdFeB magnet demand kept strong since this Q3, which supported Chinese PrNd mischmetal prices to increase sharply in November. In view of the strong demand, I believe Chinese PrNd mischmetal prices would show uptrend in general in the coming two months.

Asian Metal: Dragged by the spread of COVID-19, the global economy has been dim over the past months. However, according to Asian Metal's statistics, the average operating rate of Chinese NdFeB magnet plant in Q3 2020 reached around 72%, up by about 2.5% YOY. Would you please share your company's outputs so far this year?

Joanna：We succeeded in increasing our NdFeB magnet production this year and our NdFeB magnet output so far this year reached about 2,000t, with an increase of about 80% YOY. Our ultimate target is to enlarge the production to 5,000t. This year, we started the construction of our new NdFeB magnet workshop, which covers an area of 50 mu. We also purchased some equipment for the new workshop.

Asian Metal: May I know your prediction of NdFeB magnet demand in the coming year?

Joanna：I hold an optimistic attitude towards NdFeB magnet short term demand maybe because our clients mainly come from automobile industry. In my opinion, the automotive industry, especially the new energy vehicle industry has a very promising future.

Asian Metal: European and Japanese automobile industries revived since this July. The American automobile market also recovered slowly since late this Q2. Would you please share your opinion about the magnet demand trend from automobile industry?

Joanna：Dragged by the outbreak of COVID-19, sales volumes of some Japanese and European automobile producers declined by around 40% in this Q1 and Q2. But European and Japanese automobile markets saw increasing demand in this Q3. In my opinion, the upgrading and development of automobile industry would support NdFeB magnet demand in the future. Young people's consumption concept change constantly and they may change their cars like change mobile phones in the future. I believe NdFeB magnet demand from automobile industry would keep climbing in the coming years. As far as I know, current global annual demand for automobile reaches around 24 million, which include at least 10% of hybrid and electric vehicles. New energy cars need more NdFeB magnet than traditional cars. Generally speaking, the start motor and engine of a new energy car need to consume around 228 pieces of NdFeB magnet, so I believe NdFeB magnet demand from automobile industry would become quite considerable.

Asian Metal: As the foremost application of rare earth, how do you think about NdFeB magnet's long term demand trend?

Joanna：I am also confident towards NdFeB magnet long term market because I'm bullish on outlook of energy conservation and emission reduction as well as automobile markets. As far as I know, Europe would require cars to emit no more than 75 milligrams of carbon since 2022. I believe this will promote the development of hybrid and electric vehicles industries, which will support Chinese NdFeB magnet demand. All in all, I believe NdFeB magnet market owns a promising future.

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

Joanna：It's glad to accept Asian Metal's interview, Thank you!