Growing demand for chips to boost rare earth salt development

Asian Metal: Hello,Mr. Xiao! Thank you for accepting our interview. Could you please briefly introduce your company and your main business?

Mr.Xiao: Established in 2011, our company is located in Xinmin Industrial Zone of Qianwei County and covers an area of 28 Mu. With 115 employees now, our company mainly engages in the R&D and production of light rare earth deep processing products. Currently, our main product is self-developed high purity ceric ammonium nitrate (CAN), which is mainly used in the liquid crystal glass circuit corrosion, ternary catalyst, display polishing, memory hard disk polishing, oil production, environmental protection, organic synthesis, military, medicine and other high-tech fields. Now my company's high purity CAN production capacity reaches 3,000tpy, which already achieved the leading position in the world and we mainly sell our products to Japan, South Korea, the European Union, the United States, etc. Besides, in order to meet customers' demand, we also produce high purity cerium hydroxide, cerium nitrate, lanthanum nitrate, cerium chloride, lanthanum chloride, neodymium chloride, cerium acetate, lanthanum acetate, ceric sulfate, ammonium cerium sulfate and other products. Our company already established a professional product research and development team, built an effective quality management system and been equipped with leading rare earth testing equipment, which provide an effective guarantee for the sustainable development of the company.

Asian Metal: Would youlike to share us your career in rare earth industry? As an independent researcher of CAN, can you introduce the history and process of your trial production and promotion process in those years?

Mr.Xiao: Since I entered the rare earth industry in 2000, I already engaged in rare earth's research, production and sales for more than 20 years. At that time, the electronic grade CAN were mainly provided by Japanese and European companies with high prices, so some Japanese customers expected Chinese companies could offer the product with lower prices. In view of this situation, I did a lot of process experiments in 2000 and finally succeeded in producing electronic grade CAN that could meet customers' requirements in 2001 after repeated communication with them. In order to meet the consumption volume from customers abroad, I presided over the construction of China's first high purity CAN production line in 2003. However, the quality of our product was unstable at the beginning. For example, we needed to prepare around 30t of the material for customers to choose, 18t of which could meet customers' requirements. But now, the product quality stays stable and most customers are exempt from inspection for our products. The purity of CeO2/TREO also increased from ever 99.9%min to the current 99.999%min, and non-rare earth impurities was controlled from 3ppm to the current 1ppm or even 0.5ppm and some impurities were controlled within 0.1ppm.

Asian Metal: In recent years, the rare earth mining amount in China and abroad increased year by year to meet the increasing demand for PrNd products upon the vigorous developmentof NdFeB magnet, which resulted in the surplus of lanthanum and cerium products at the same time. As a deep processing enterprise of light rare earth products, how do you think could Chinese light rare earth producers break throught the dilemma?

Mr.Xiao: There is no direct solution in the short term to solve the problem of excessive supply of lanthanum and cerium products. However, the surplus of lanthanum and cerium products also leads to low prices, which provides a good opportunity for deep processing companies of lanthanum and cerium products. On the one hand, what should Chinese lanthanum and cerium deep processing enterprises do is to promote the product quality, so that we can break the monopoly of Japan, Europe and the United States on high-end lanthanum and cerium products and seize the market share in the high-end field. On the other hand, the related rare earth deep processing enterprises can cooperate with the downstream enterprises more widely to cultivate and develop the applications of some rare earth products considering the wide application areas for rare earth fine chemicals.

Asian Metal: Chinese cerium carbonate prices stayed relatively stable in H1 2021. What's your point of view on Chinese cerium carbonate price trend in H2 2021?

Mr.Xiao: Despite the sufficient supply in the spot market, considering Chinese PrNd oxide and other rare earth oxides prices increased sharply in H1 2021, Chinese cerium carbonate prices stays relatively stable in H1 2021. However, PrNd oxide and other rare earth prices showed downtrend since Q2, so I believe that Chinese cerium carbonate prices would show softening trend in H2 2021 upon the excessive supply of cerium carbonate. As upstream producers stayed active in promoting sales and they held heavy stocks, Chinese cerium carbonate (CeO2/TREO=100%) mainstream prices dropped from RMB8,500-9,000/t (USD1,318-1,395/t) early this June to RMB8,200-8,700/t (USD1,271-1,349/t) by the end of June. Therefore, I estimate that Chinese cerium carbonate prices would decline to around RMB8,000/t (USD1,240/t) by the end of this year.

Asian Metal: How about the production capacity and annual output of CAN in China? What's the main consumption area?

Mr.Xiao: As for CAN, the Chinese annual production capacity reaches to 8,000t, and the annual consumption volume records around 6,000t now, and annual output stays balance with the consumption volume as producers usually arrange production according to obtained orders. The product is mainly used in the catalyst and the electronic industries, which account for about 70% and approximately 30% of the total market share respectively. I expect that the consumption volume for catalyst industry would increased by 10-20% YOY in the coming three to five years, during which consumption volume in electronic industry would rise by 20-30% YoY. Therefore, I believe that the growing chips demand would boost the development of rare earth salts in China.

Asian Metal: What's your opinion on Chinese rare earth salt market prospect in the coming three years?

Mr.Xiao: I believe that Chinese rare earth salt products would have a bright future in the coming few years due to the quality improvement in the industry and the increasing demand for high quality rare earth products, especially in domestic chip industry, which needs the high purity cerium salts as the precursor in the refine polishing process, such as the high purity cerium oxalate and cerium nitrate that we exported to Japan, Europe and the United States. Those rare earth salt products would be the R&D direction of rare earth deep processing enterprises in China.

Asian Metal: How about your project’s progress of 3,000t of rare earth salts? What rare earth salt products you produce now? What's your plan in the following three to five years?

Mr.Xiao: Currently, we mainly produce CAN with the annual production capacity of 3,000t. Besides, we also produce high purity cerium carbonate, cerium hydroxide, yttrium hydroxide, cerium nitrate, lanthanum nitrate, cerium chloride, lanthanum chloride, neodymium chloride, cerium acetate, lanthanum acetate, cerium sulfate, ammonium cerous sulfate and other rare earth products. According to the current demand of chip development in China, we plans to reach or even exceed the quality of high-end rare earth salt products imported by chip enterprises from Japan, Europe and the United States in the next three to five years, so that out company can occupy a place in the high-end field.

Asian Metal: On August 18, 2020, Leshan was hit by a once-in-a-century flood disaster. What was the disaster situation of your company then? What has been done to rebuild?

Mr.Xiao: The once-in-a-century flood disaster in 2020 already caused a loss of nearly ten million yuan (USD1.55 million) to our company. For the post-disaster reconstruction, our company made the concerted efforts to resume production within one month to minimize the impact of production interruption. During the process of reconstruction, our customers understood us to the maximum extent. After we resumed production, our customers supported us with sufficient orders, so that we quickly returned to the normal production level.

Asian Metal: At last, would you like to share us the feeling on company’s management?

Mr.Xiao: The past over twenty years that I engaged in rare earth industry was the best time in my life. I witnessed the development of China's rare earth industry and also gained the knowledge and achievements during this period. As for the enterprise operation and management, I think the most important thing is to work and treat customers by heart and soul, so that people and things around can be radiated by this kind of work enthusiasm. As a consequence, we can naturally achieve the ideal result.

Asian Metal: Thanks for your share today, Mr. Xiao! May your company a thriving development!

Mr.Xiao: Thanks for your concern to our company. We are also willing to keep cooperating with Asian Metal to promote the rare earth deep processing products to a new level and make a modest contribution to the development of China's rare earth industry.