----Interview with Yan Mi
General Manager
Baotou Shengyou Rare Earth Co.
Founded in November of 2008, Baotou Shengyou Rare Earth Co.’s predecessor was Baotou Kemao New Technology Development & Application Research Institute, which was established in 1993 and changed name into Baotou Keju Rare Earth Co. in 2002. The company was the first PrNd mischmetal producer in both China and global markets. It owns an annual production capacity of 3,000t of PrNd mischmetal at present. The second stage of project is under construction and would be put into oeration in August 2024, when the company’s PrNd mischmetal production capacity would reach 7,000t.
Asian Metal: Welcome to Asian Metal’s interview, Mr. Mi. Please introduce your company and main business briefly.
Mr. Mi: Established in 2008, Baotou Shengyou Rare Earth Co.’s predecessor was Baotou Kemao New Technology Development & Application Research Institute, which was founded in 1993 and changed name into Baotou Keju Rare Earth Co. in 2002. We are the first PrNd mischmetal producer in both China and global markets. All smelters produced separated neodymium metal not PrNd mischmetal that time. We asked our separation plant provided PrNd oxide rather than separated praseodymium oxide 99.5%min or neodymium oxide 99.5%min. After one year’s improvement, we succeeded in providing high quality PrNd mischmetal, which could be used in the production of NdFeB magnet industry. We own an annual production capacity of 3,000t of PrNd mischmetal at present. The second stage of our project is under building and we expect to start the commercial production in August, when our PrNd mischmetal production capacity would increase to 7,000t.
Asian Metal: Chinese PrNd mischmetal prices declined sharply from January to April of 2023. The current Chinese PrNd mischmetal mainstream prices dropped to RMB450,000-455,000/t (USD63,085-63,786/t) EXW T/T 30 days, a decline of 47% compared with RMB850,000-855,000/t (USD119,161-119,862/t) in early January. What do you see as the reason of the sharply decreasing prices?
Mr. Mi: In my opinion, there were two reasons that resulted in the sharp decrease. The first one was the softened demand from application industries resulted in the demand shrinkage in the PrNd mischmetal market. Majority of wind turbine manufacturers have switched from direct drive technology to semi-direct drive technology, which reduced 70-90% NdFeB magnet consumption, in order to reduce production costs. The second reason was the increasing supply. As far as I learnt, China has around 40 PrNd mischmetal producers at present. Their production capacity recorded around 100,000t in 2022 and increased into 110,000t in Q1 of 2023, with an excess capacity of about 50,000t.
Asian Metal: Chinese PrNd mischmetal mainstream prices fluctuated in a narrow range and showed “up-down-up-down” trend since May 2023. The current Chinese PrNd mischmetal mainstream prices hover at RMB495,000-500,000/t (USD68,914-69,611/t) EXW T/T 30 days. What do you see as the reasons of the relatively stable prices?
Mr. Mi: Given that rare earth is strategic resources, I don’t think PrNd mischmetal mainstream prices would drop too low. Furthermore, the PrNd mischmetal mainstream prices already moved down to around RMB550,000/t (USD77,104/t) in late April 2023, which already stood close to producers’ costs. In my opinion, the reasonable prices for PrNd oxide and mischmetal are RMB400,000-450,000/t (USD55,995-62,994/t) and RMB500,000-550,000/t (USD69,994-76,993/t). These prices would not be too high to depress the development of downstream industries and could ensure producers have around 10% of gross profits.
Asian Metal: How about the PrNd mischmetal demand from NdFeB magnet industry in 2023? How do you predict the yearly change of PrNd mischmetal from NdFeB magnet industry in 2023?
Mr. Mi: As far as I learnt, the NdFeB magnet demand from electric vehicle industry in 2023 increased, which resulted in an increase of 5-10% YoY of Chinese NdFeB magnet output in 2023. Accordingly, China’s PrNd mischmetal demand in 2023 rose by 5,000-6,000 YoY to about 60,000t.
Asian Metal: Chinese NdFeB magnet producers substituted cerium metal for around 10% PrNd mischmetal consumption in the production of low performance NdFeB magnet in order to reduce production costs. Do you think the cerium metal consumption would impact PrNd mischmetal demand obviously?
Mr. Mi: I don’t think the cerium metal consumption in the NdFeB magnet production will impact PrNd mischmetal demand obviously. Given that the current PrNd mischmetal mainstream prices already hovered at around RMB550,000/t (USD76,993/t), which means that cerium metal prices have no obvious advantages over those of PrNd mischmetal. Furthermore, it’s hard to replace PrNd mischmetal by using cerium metal in the production of the high performance NdFeB magnet because of the requirements for ensuring the coercive force, temperature coefficient and corrosion resistance.
Asian Metal: In view of the oversupply, what’s your prediction of the PrNd mischmetal demand in 2024?
Mr. Mi: The Chinese PrNd mischmetal market would still witness surplus supply in 2024. Producers would run with annual operating rates of 60-70%. But I still predict that the PrNd mischmetal demand in 2024 would increase YoY. The trend of electric vehicle replacing fuel cars is definite. Moreover, I learnt that some wind turbine producers consider switching back to direct-drive technology due to the unsatisfactory performance of half-drive technology. Besides, the demand from real estate industry would pick up as China introduces driving policies to stimulate economic development, which would result in rising demand of NdFeB magnet from household appliance industry.
Asian Metal: How do you forecast the PrNd mischmetal price trend in Q1 and the whole year of 2024?
Mr. Mi: Consumers would replenish stocks actively before the Chinese Spring Festival holiday, so the Chinese PrNd mischmetal market would witness more buying activities in January 2024. The prices would turn to stable trend in February 2024 and may increase in March 2024. I predicted that the Chinese PrNd mischmetal mainstream prices would fluctuate in a narrow range of RMB500,000-600,000/t (USD70,095-84,113/t) in 2024.
Asian Metal: What do you see as the opportunities and challenges of Chinese PrNd mischmetal producers in 2024? How do you plan to respond?
Mr. Mi: I believe Chinese PrNd mischmetal producers face more challenges than opportunities at present. Major challenges include overcapacity, shortage of workers and difficulties of intelligent production. I plan to increase product types, to produce high value-added products and to control product quality. I urge leading companies to produce more high value-added products with advantages of their talent, technology and capital.
Asian Metal: Thanks for your excellent sharing. I will your company a better future!
Ms. Mi: Thanks for the interview! I wish Asian Metal further success!
