Asian Metal: Thanks for accepting the interview Mr. Yan. Please introduce your company briefly.

Gary: Sheensen Magnetics is specializing in the R&D, production and solution of NdFeB magnet. The company covers an area of 51 mu with a construction area of 45,000 square meters. We own 72 national patents, including 51 invention patents. We had established close industry-university-research cooperation with Zhejiang University, China Jiliang University and other universities.

Asian Metal: Which industries do your consumers mainly come from?

Gary: Our NdFeB magnet products are mainly applied to automotive (including leading companies, BYD, Tesla and so on), industrial automation, compressor, wind power, acoustics, water pump industries.

Asian Metal: Would you please introduce your current production capacity? Do you plan to enlarge production capacity in the coming two years?

Gary: Our current NdFeB magnet production capacity is 3,500t. We are bullish about NdFeB magnet demand outlook and plan to enlarge our production capacity in the coming two years with a ultimate target of 7,000t.

Asian Metal: China’s NdFeB magnet production capacity enlarged sharply over the past two years. How many tons you think current China’s NdFeB magnet production capacity already reaches? Whether the industry faces overcapacity?

Gary: There are around 200 NdFeB magnet producers in China with a total production capacity of about 450,000t. 7.5% and 84% of these Chinese NdFeB magnet producers’ production capacities are higher than 3,000t and lower than 1,500t respectively. The biggest company owns an annual production capacity of 20,000t. The Chinese NdFeB magnet market sees seriously polarization. The low performance NdFeB magnet markets, which major applications are mainly luggage, consumer electronics and other industries, faces oversupply but the high performance NdFeB magnet, which are mainly apply into new energy vehicles market, industrial motor industry, etc., supply is tight.

Asian Metal: How do you predict China’s NdFeB magnet output in 2021? How about the change YoY?

Gary: According to the growth rate of leading NdFeB magnet producers, I predict that China’s NdFeB magnet output would reach 216,000-252,000t in 2021, with an increase of more than 20% YoY. In my opinion, China’s NdFeB magnet output may increase by around 20% YoY in 2022.

Asian Metal: Chinese PrNd mischmetal prices showed climbing trend in general over the past one year. Current mainstream prices of the material stand at RMB1,310,000-1,320,000/t (USD206,325-207,900/t) EXW T/T 30 days, compared with around RMB510,000/t (USD80,070/t) EXW T/T 30 days in early January 2021. This led to increasing prices in Chinese NdFeB magnet industry. May I know whether NdFeB magnet consumers accept the price increase?

Gary: Driven by climbing Chinese PrNd mischmetal prices so far this year, so we had to increase NdFeB magnet prices over the past months. But the majority of NdFeB magnet consumers held wait-and-see attitudes and refuse to accept price increase at present. However, I believe they would accept this in the coming year.

Asian Metal: What impact the soaring rare earth raw material prices would bring to NdFeB magnet industry?

Gary: In my opinion, the rising rare earth raw material prices would depress NdFeB magnet downstream application. Consumers from some low and middle end industries would substitute NdFeB magnet by using ferrite. I think relatively stable rare earth raw material prices would support the develop of NdFeB magnet industry. Our clients’ demand of our high performance NdFeB magnet remains strong and we still hold optimistic attitudes towards the demand outlook.

Asian Metal: Participants predict that some consumers would replace NdFeB magnet by using SmCo magnet due to increasing NdFeB magnet prices. Would you please share opinion regarding this?

Gary: As the King of magnet, NdFeB magnet owns superiority that others magnet don’t have. Therefore, I don’t think the replacement would depress NdFeB magnet industry obviously in the short term. Although rare earth raw material prices went up resulted in rising prices in Chinese NdFeB magnet market, I still think NdFeB magnet prices are cheaper than SmCo magnet prices due to the low content of rare earth elements. SmCo magnet contains around 70% samarium and cobalt. Both NdFeB magnet and SmCo magnet belong to hard brittle materials but NdFeB magnet is easier to process and owns a higher yield.

Asian Metal: What you see as the most promising application of NdFeB magnet? How do you think about the annual growth rates of these industries?

Gary: I am confident about the demand outlook of new energy vehicles, industrial automation and wind power industries. In foresee annual compound growth rate of more than 35% and 8% of new energy vehicles and wind power markets in the coming years.

Asian Metal: What’s your opinion about Chinese NdFeB magnet demand outlook in the coming two years and in long-term?

Gary: Global NdFeB magnet output recorded around 150,000t in 2018, including 50,000t of high performance NdFeB magnet. China produced 125,000t of NdFeB magnet in 2018, which accounted for 85% of the global NdFeB magnet production. China’s high performance NdFeB magnet output recorded about 27,000t in 2018, which accounted for 56% of global high performance NdFeB magnet. These data showed that the global market account rate of China’s high performance NdFeB still has room to increase. NdFeB magnet demand increased sharply from 2019. Taking new energy vehicles, wind power and variable frequency air conditioner industries for example, magnet demand from these markets were 10,800t, 8,400t and 9,500t respectively in 2019, with increases of 47%, 41% and 22% YoY. Magnet demand moved up further in 2020 and 2021. I believe the demand would keep increasing in the coming two weeks. This will provide opportunity for Chinese good NdFeB magnet companies.

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

Gary: Thank you!