Super magnesium alloy is the direction of automobile lightweight

Asian Metal: Mr. Bruno Maier, thanks for taking the interview by Asian Metal. Please introduce your business briefly.

Mr. Bruno Maier: Allite is a Material Sciences business that specializes in Magnesium Alloy. The company currently has offices in the USA, Jurong, CN, and Hong Kong, CN. Our focus has been on the development of proprietary high-performance rare earth magnesium alloys. Magnesium alloy development and demand are increasing due to the lightweight and eco-friendly nature of the material. Allite uses proprietary and patented processes to produce our exclusive alloys. We also have a team of engineers and academics to facilitate the development of customized alloys to meet specific applications. In addition to magnesium alloy and high-performance rare-earth magnesium alloy, Allite also offers a full line of services and capabilities including forging, extrusion, welding, and die-casting technologies.

Asian Metal: I know that Allite focuses on super magnesium, could you give me some introduction for the particularity and superiority of the metal?

Mr. Bruno Maier: The proprietary Allite Super Magnesium rare earth alloys are unique for several reasons. First, the team uses a patented Flux Filter to ensure purity. The Allite process is designed to reduce as much oxygen and other inclusions as possible during the casting of raw material - delivering a high-quality pure mag alloy. Then, we also utilize a proprietary cooling process that results in a finer grain structure. Besides, our processes as well as our material formulations deliver Super Mag alloy that improves corrosion resistance, delivers increased Yield and Ultimate Tensile Strength, and greater elongation percentage making the alloys superior to alternatives on the market. Individual Super Mag materials have been developed for specific applications in Extrusion, Welding, Forging, and Casting.

Asian Metal: What’s about your annual consumption for magnesium ingot? Which industries are your magnesium products applied in and how about the exact proportions?

Mr. Bruno Maier: Our initial entry as a start-up was to focus on products like cycling and sporting goods which demonstrate broad use and consumer understanding. The categories also have extensive testing that demonstrate the strength and capabilities of our materials and manufacturing capabilities. At this time, we are unable to share the exact quantities our clients are producing, but since our commercial launch with VAAST Bikes, Allite Super Mag is being applied across many other global industries. Today it is being used in Cycling, Sporting Goods, Hunting and Fishing, Medical and Electronics categories. We are also working on several projects in the Automotive, Aerospace, and Personal Defense sectors.

Asian Metal: Allite began to produce magnesium bicycle from 2019 and your products have been well received among clients. What’s about the advantage for the product and how about the production cost situation?

Mr. Bruno Maier: Yes, we began producing magnesium alloy bike frames for VAAST Bikes in late 2019. The bikes were launched in the US market in April and will ship to Europe in September 2020. The initial reaction from retailers and consumers has been very positive and demand continues to grow for VAAST Bikes. The true benefit of using our Rare Earth Mag Alloy AE81 for bicycle frames is that it is crafted for superior weldability and provides the perfect combination of weight, stiffness and shock absorption. With Super Magnesium, VAAST is able to achieve lightweight frames that maintain high tensile strength and vibration dampening qualities due to its unique molecular structure. This combination delivers improved performance and comfort for the rider, enabling them to ride longer and outperform other riders. The Super Mag frame also provides greater corrosion resistance. The proprietary rare earth element is added to the magnesium as a trace element, which purifies the alloy solution. In addition, the VAAST frames are coated with a Plasma Electrolytic Oxidation (PEO) finish that is hard-wearing and aids in corrosion mitigation by protecting the inside and outside of the frame tubing. Another benefit of our magnesium alloy is that it is eco-friendly. Production and waste from magnesium is much more earth friendly than producing with Aluminum or Carbon Fiber. As a comparison, magnesium uses 40% less energy than aluminum to produce. The entire product life-cycle is more environmentally friendly, from low-impact production to 100% recyclability. The frames are slightly more expensive to produce, than a standard Aluminum frame, but more price competitive than an equivalent carbon frame. The performance characteristics (weight, stiffness, damping) and environmentally friendly nature of the material justify the higher price points. We’re also working to integrate our material into components, and using new mag alloys and our proprietary manufacturing processes to produce more price competitive frames. The products are performing so well that we’ve seen increased demand from several other bikes brands and component manufacturers. In addition to bikes we’re also seeing increased demand from diverse industries including Aerospace, Automotive, Trains, Electronics, and Construction.

Asian Metal: Restricted by serious COVID-19, many plants for magnesium ingot, magnesium alloy and die casting plants reduced output restricted by slow demand and heavy pressure on selling over the past several months. How about Allite’s situation? How do you cope with the impact?

Mr. Bruno Maier: Allite’s Jurong, CN like many facilities were shut down for a period. We even had employees that were quarantined in Wuhan for several months. The shutdown caused a brief interruption of our operation. It is a testament to our team in China that they all came together and got the factory up and running as quickly as possible and minimized any long-term impact to the business. Some industries that we work within have seen an increased demand in product during COVID-19, and our team has done an excellent job fulfilling the needs of our clients in these sectors throughout the pandemic. Our team in China is a dedicated group of engineers, scientists, and manufacturing personnel that are quite exceptional. The entire team is 100% committed to customer satisfaction and ensuring that we deliver quality material and finished goods.

Asian Metal: Prevailing aluminum ingot prices kept increasing since the middle of March, but mainstream prices for magnesium ingot with better properties continued to decrease from the middle of February, how do you think about this situation? What’s about your anticipation of the demand and price trend of magnesium alloy products for coming months in 2020? When will the market resume to a regular state?

Mr. Bruno Maier: During the last few months, we’ve seen increased demand for material and new product development from a number of business sectors. Super Magnesium has proven material benefits that bring value to numerous applications across many industries, and we continue to invest in the advancement of our alloys. The Allite team is blessed in that we’ve not seen a drop in current demand or new customer interest. As far as our business is concerned, we’ve returned to a regular state and are looking forward to continued growth. Prevailing upstream magnesium ingot prices increased from middle to late February due to foreign buyers’ panic purchase caused by COVID-19 in China. However, after the outbreak of the epidemic in the world, market transactions slowed down and prices kept decreasing. Up till now, mainstream prices in China already decreased to RMB12,500-12,800/t (USD1,785-1,828/t) EXW D/P, a decrease of RMB2,800/t (USD400/t) from the peak price within this year. Taking continuously high operation rates among suppliers but slow buying activities among buyers, mainstream prices for magnesium ingot would decrease further. Given this situation, prevailing prices for magnesium ingot would hover at the current low level in the coming months and market demand is hard to improve before Q2 of 2021. In addition, magnesium alloy market would keep suffering sluggish market in the coming months.

Asian Metal: Most insiders believe lightweight of automotive is a bright future to promote the application for magnesium products. How do you think about it and what’s about your direction to promote the growth in super magnesium?

Mr. Bruno Maier: We agree with the industry insiders. The automotive market has a strong outlook when it comes to the use of Mag Alloy. In fact, we believe that our Super Mag Alloys are the perfect solution due to the increased strength, corrosion resistance, and elongation for formability. The opportunity is significant as low carbon, energy conservation and emission reduction are being advocated in countries around the world. Exhaust emission regulations set higher requirements for automobile production, so light weighting will become more important as auto manufacturers look to save energy and reduce emissions. For every 10% reduction in weight, fuel efficiency can improve 5%-7%. Magnesium use in the production of automobiles will continue to increase as companies like Allite improve their material offerings and manufacturing capabilities. There is significant opportunity to expand the use of magnesium in China and the USA. This growth in light weighting within automotive is certainly significant to us and we continue to improve our alloys for such applications and build relationships within the industry.

Asian Metal: Thanks Mr. Bruno Maier accepting Asian Metal’s interview. We wish Allite Inc. a more prosperous future!

Mr. Bruno Maier: Thanks for your attention to Allite Inc. Let's work together and look forward to a better tomorrow. In addition, we also expect that Asian Metal continue sticking to the principle of objectiveness and timeliness in providing clients with better information about the magnesium market.