Rare earth salts output to keep growing

Asian Metal: Hello, Mr. Yang, and welcome to this interview with Asian Metal. Could you briefly introduce your company and its main business?

Mr. Yang: Since its establishment in 2012, Sichuan Wonaixi New Materials Technology Co., Ltd. has been deeply engaged in the R&D and production of rare earth functional materials. We are a "National High-Tech Enterprise" and a Sichuan Province "Specialized and Sophisticated Enterprise." We currently operate specialized production lines with an annual capacity of 10,000 tonnes of high-purity rare earth salts and 3,000 tonnes of precision rare earth polishing powders. In the field of fine-processing of rare earth salts, Wonaixi is the largest and most product-diverse enterprise in China, as well as a technologically leading and export-oriented company. Our products cover nine major categories of rare earth products—including rare earth nitrates, acetates, sulfates, hydroxides, fluorides, chlorides, carbonates, and polishing powders—as well as zirconium salts, totaling over 50 product types. These are widely applied in national defense, military, aerospace, pharmaceuticals, electronics, new energy, three-way catalysts, environmental protection, precision optics, and many other fields, meeting the diverse needs of customers in niche segments.

Asian Metal: What is the current production capacity of China's deep-processed rare earth salt products? What was the output in 2025?

Mr. Yang: The deep-processing of rare earth salts mainly targets downstream applications beyond rare earth metal smelting and permanent magnet materials—for example, catalysts, semiconductors, pharmaceuticals, optoelectronic materials, and other fields. Deep-processed rare earth salts are essentially custom-produced for specific industries and play a role akin to "industrial vitamins." The overall capacity in this segment is relatively small, and based on our incomplete statistics, it may be around 20,000 tonnes. Estimated output for 2025 is approximately 16,000 tonnes. I expect that over the next 2–3 years, the production capacity of China's deep-processed rare earth salt products will not fluctuate significantly and will likely hover around 20,000 tonnes. However, output may grow by around 10% annually over the next 2–3 years.

Asian Metal: What is the current production and demand situation for anhydrous neodymium chloride and ammonium cerium nitrate in China?

Mr. Yang: For these types of specially customized products, we generally maintain a balance between production and sales, and our plant produces on a made-to-order basis. Taking ammonium cerium nitrate as an example, Wonaixi currently produces about 4,000 tonnes per year, mainly used in the synthesis of cerium-zirconium solid solutions, which are core materials for automotive exhaust catalysts. We expect demand in this area to continue to grow. Although new energy vehicles are replacing some fuel-powered vehicles, roughly half of new energy vehicles are plug-in hybrids and range-extended electric vehicles, which still rely on efficient exhaust catalytic systems. Globally, traditional fuel-powered vehicles and motorcycles in regions such as Southeast Asia and Latin America continue to grow, so there is still room for growth in exhaust catalyst applications. As emission standards become increasingly stringent, ammonium cerium nitrate—as a key material for high-performance catalysts—will further erode the market share of other traditional materials. At the same time, emerging application areas are also expanding the market for ammonium cerium nitrate. For example, in semiconductor etchants, nanomaterial precursors, carbon nanotube cutting, and chromium-free passivation treatments, we have received inquiries from over 20 different downstream industries in the past three months alone. Although most of these are still in the R&D phase, this is already a very positive signal. We expect demand for ammonium cerium nitrate to increase by approximately 10% in 2026.?As for anhydrous neodymium chloride, it is currently mainly used in neodymium-based cis-polybutadiene rubber as a key catalytic additive. The quantity used is extremely small, and the market size is still less than 100 tonnes. However, the role of neodymium-based cis-polybutadiene rubber is changing—from a mere "high-performance additive" to the cornerstone of tire performance in the era of green mobility, driven by technological iteration, capacity expansion, and a reshaping of the global landscape. As a result, demand for anhydrous neodymium chloride will gradually rise. The problem is that anhydrous rare earth chlorides have long production cycles and low output efficiency, leading to high processing costs, making them unaffordable for many industries that would like to use them. The new equipment that Wonaixi is developing is aimed at solving this pain point. The new equipment will effectively increase capacity and significantly reduce costs, and we expect it to be installed and commissioned in 2026. We hope that through this cost reduction, we can truly expand the application scope of anhydrous rare earth chlorides.

Asian Metal: Which application areas have seen the fastest growth in demand for deep-processed rare earth salt products over the past few years?

Mr. Yang: Currently, the application of rare earths in emerging fields shows a notable characteristic of "growth across multiple applications and structural upgrading." First, in terms of demand structure, although emerging fields are actively exploring, they are still in the early stages of development. We see many cutting-edge directions attempting to introduce rare earths for material modification, but demand remains relatively scattered, and the volume in individual fields is temporarily limited. However, in the long run, these explorations represent the direction of future growth. Over the past few years, demand for deep-processed rare earth salts in the water treatment industry and for vanadium-free SCR low-temperature catalysts has grown at annual rates of about 50% and 20%, respectively. In comparison, traditional catalysis remains the "ballast" for rare earth salts, but it is undergoing profound structural upgrades. Taking petroleum catalytic cracking as an example, yttrium's role has evolved from an ordinary auxiliary additive to an irreplaceable strategic element. This is driven by the deterioration of feedstock quality and the trend of "oil-to-chemicals," with yttrium-containing formulations effectively protecting catalyst structures. More notably, the mainstream product forms demanded by the market have shifted from basic yttrium oxide or yttrium-rich rare earth carbonates to customized yttrium nitrate and yttrium chloride solutions. These water-soluble yttrium salts ensure more uniform dispersion in catalyst production, thereby improving catalytic efficiency and stability. This reflects the downstream requirement for rare earth products evolving from "just having the right composition" to "being easy and convenient to use." Similarly, there is steady growth in demand for industrial exhaust catalysts.?Second, the rapid development of intelligent driving is creating new growth opportunities for high-purity rare earth optoelectronic materials. Automotive LiDAR and infrared thermal imaging systems are core hardware components for advanced intelligent-driving perception. In the manufacturing of these optical components, high-performance rare earth coating materials are indispensable—for example, using their low refractive index properties for anti-reflective coatings to reduce optical signal loss and improve detection accuracy and imaging clarity. Demand in this area is rising in tandem with the increasing penetration rate of intelligent driving.?The application of cerium in the semiconductor field has also entered a new stage. Cerium-based materials are already well-established for use as abrasives in chemical mechanical polishing (CMP), but their applications do not stop there. As chip manufacturing processes continue to advance, the requirements for polishing slurries have become increasingly stringent, giving rise to new demand for different types of cerium salts (such as cerium nitrate and cerium acetate) as precursors. These high-purity cerium salts can serve as key precursors in new formulations to meet the stringent requirements for low defect rates and high flatness in advanced processes.?In summary, a clear picture emerges: the market not only needs large-volume, widely used basic rare earth products but also increasingly craves customized material solutions that meet specific physicochemical indicators, forms, and stability. This places higher demands on the technological responsiveness of the entire industrial chain.

Asian Metal: Emerging fields such as solid-state batteries are cultivating potential demand for rare earth salts. When do you expect these areas to generate large-scale incremental demand for deep-processed rare earth salt products?

Mr. Yang: If the technical route of LLZO (lithium lanthanum zirconium oxide) as a solid electrolyte proves successful, the incremental demand generated by this market could be enormous. This is also the area that has attracted the most attention. I believe that, given the current pace of technological development in the new energy sector, it won't take too long.

Asian Metal: What rare earth raw materials does your company mainly need to procure for producing deep-processed rare earth salt products? What was the demand over the past year?

Mr. Yang: Deep-processed rare earth salt products mainly require the procurement of carbonates and oxides of lanthanum, cerium, praseodymium, neodymium, yttrium, and other rare earth elements. In 2025, China's output of deep-processed rare earth salts was around 16,000 tonnes, with rare earth oxide consumption of approximately 8,000 tonnes.

Asian Metal: Over the past two years, cerium carbonate prices have increased year on year, with a particularly significant increase in the first half of this year. Currently, the mainstream price for Chinese cerium carbonate (TREO 45%min, CeO2/REO 100% EXW China) is hovering at RMB 13,000–13,500/t (USD 1,936.97–2,011.47/t) EXW China, cash, representing a 33.8% increase compared to the end of December 2025. How does this significant increase in raw material prices affect the prices of deep-processed rare earth salt products such as ammonium cerium nitrate?

Mr. Yang: The rise in rare earth raw material prices has a very significant impact on the prices of deep-processed rare earth salt products like ammonium cerium nitrate. Due to our continuous production model and year-round regular procurement mechanism—with high raw material turnover rates—price fluctuations at the raw material end are immediately reflected in product costs.

Asian Metal: How accepting are downstream customers of the current price increases?

Mr. Yang: Regarding lanthanum and cerium products, downstream customers have developed an entrenched perception after experiencing a prolonged period of market weakness—that these products are sufficiently supplied, prices are stable, and no major fluctuations will occur. However, since last year, especially this year, raw material price increases have been large in magnitude and rapid in pace, leaving many downstream customers struggling to understand the situation. Under these circumstances, it is very difficult for us to reasonably pass on the rising cost pressure, and customers are extremely price-sensitive. But in my view, a deeper issue than price increases is the challenge of supply security itself. Many customers outside the rare earth industry do not understand the structural changes taking place in this sector, and therefore have not made corresponding adjustments in their planning in advance—or even find it difficult to do so. This puts considerable pressure on both our procurement and sales processes.

Asian Metal: How do you see the competitive landscape of the rare earth salt industry over the next two years? Will there be further capacity consolidation or a trend toward specialized division of labor? In your opinion, what is the development direction for rare earth deep-processing salt enterprises?

Mr. Yang: I believe that over the next two years, the rare earth salt fine-processing industry will bifurcate into two categories:

The first category is functional solution providers. This is likely to be the most active area for specialized division of labor and where new industry leaders are most likely to emerge. These companies no longer simply sell products; instead, they provide pre-formulated precursors with specific ratios and forms for emerging scenarios such as solid-state batteries and automotive optics. The composition of such products often involves more than just rare earths themselves—they represent a complete material solution. Their core competitiveness lies in a deep understanding of downstream processes and the ability to co-develop customized formulations with customers, forming hard-to-replace technical lock-in. The second category is basic salt suppliers, mainly serving traditional fields such as catalytic cracking. In this segment, products are highly homogeneous, and the key competitive factors are cost control and supply stability.?For Wonaixi, our direction is "from providing products to providing capabilities." This means we need to truly delve into customers' usage scenarios and understand the process pain points they encounter when using rare earth salts. This requires us to build deeper connections with customers in niche segments, engage in collaboration at the R&D stage, grow together with customers, and develop deep partnerships in specific application areas. What we can do for our customers may extend far beyond simply supplying a certain salt. We can further provide pre-synthesized and pre-formulated products, making the materials more stable and efficient for use on customers' production lines. Essentially, our approach is shifting from "what we have" to "what you need, we deliver." We aim to transform from an external procurement link in the customer's process chain into an integral part of the customer's R&D and manufacturing system. This is where we see our future competitiveness lying.

Asian Metal: Thank you for your wonderful insights. We wish your business prosperity and continued success!

Mr. Yang: Thank you!