Asian Metal visits Baotou Santoku, Ovonic Metal Hydride and other rare earth downstream companies in Baotou

During December 28 to 30 in 2016, Eirc Qiu, rare earth market analyst of Asian Metal, visited Baotou Santoku Battery Materials Co., Ltd., Inner Mongolia Rare Earth Ovonic Metal Hydride Co., Ltd., Mengyuan Rare Earth Science and Technology Co., Ltd., Baotou Hongbote Technology Co., Ltd., Baotou Rare Earth Huaxing Technology Co., Ltd., Baotou Jingrui New Materials Co., Ltd., Baotou Tianhe Magnets Technology Co., Ltd., Baotou Hailiang Technology Co., Ltd. and Baotou Jinshan Magnetic Materials Co., Ltd., etc. Eric conducted surveys of hydrogen storage, polishing powder, magnetic materials as well as other rare earth downstream sectors and exchanged opinions with officials from those companies.

On the morning of December 28, Eirc visited Baotou Santoku Battery Materials Co., Ltd. and exchanged views with Wang Hongjiang, Vice General Manager of the company, and Ma Xiaoping, Minister of the Purchasing Department. Mr. Wang indicated that their plant mainly buys lanthanum, LaCe mischmetal, samarium, yttrium and a small amount of LaCePrNd alloy now, with an output of around 1,200t of hydrogen storage alloy powder in 2016. He mentioned that prices for LaCe mischmetal inched up amid relatively tight supply recently. Mr. Ma claimed that the cost of raw materials accounts for around 10% of total costs in hydrogen storage alloy powder production at the moment. After explaining the price trend of related products and fierce price competition, Eric noted that insiders pay more attention to energy policy for the time being. Mr. Wang who called for rational competition in the industry disclosed that their company almost broke even in 2016.

On the afternoon of December 28, Eric visited Inner Mongolia Rare Earth Ovonic Metal Hydride Co., Ltd. and exchanged opinions with Zhu Xilin, chief engineer of the company, and Zhao Ruixia, minster of the supply department. Eric explained prices, transactions and payment terms of LaCe mischmetal and lanthanum metal. Mrs Zhao mentioned that the hydrogen storage alloy industry, with an annual capacity of around 7,000t, sees a balance between supply and demand now. However, due to disorderly competition in the industry, insiders are difficult to obtain profit margins and their company recorded a slight loss in 2016. Mr. Zhu revealed that the hydrogen storage battery has advantages in safety, charging equipment and other aspects. Eric also gave an explanation of the rare earth national reserve and the efforts made by government to crack down illegal activities within the rare earth industry. Finally, accompanied by Mrs Zhao, Eric visited the company’s analysis and testing center.

Eric visited Baotou Mengyuan Rare Earth Science and Technology Co., Ltd. afterwards and exchanged views with Zhao Wenjun, general manager of the company, and Liu Hui, vice general manager, on the price trend, market demand, etc. Currently, their company, which operates 9 electrolytic cells with 6 for the production of PrNd mischmetal and 3 for the production of LaCe mischmetal, mainly purchases praseodymium-neodymium oxide from producers and traders in South China. In addition, their company also sells NdFeB magnets with a monthly trading volume of around 30t. Eric explained the situation of outputs and stocks of PrNd and LaCe mischmetals to them.

On the morning of December 29, Eric visited Baotou Hongbote Technology Co., Ltd. and exchanged opinions with Yang Mingliang, minister of the sales department. Mr. Yang mentioned that their company, which focuses on the rare earth metal sulfide pigments market, also exports cerium carbonate, laCe mischmetal, scandium oxide and other products at present,. With an annual capacity for 25t of rare earth sulfide now, the company intends to expand the production capacity to 500tpy because of the long-term supply contract with Solvay Group. As for the rare earth business, profit margins are the focus of the company. However, it is difficult for insiders to obtain reasonable profit margins due to disorderly competition in the industry. Eric introduced market conditions of relevant products and invited Hongbote Technology to participate in the 9th International Rare Earth Summit.

Then, Eric visited Baotou Rare Earth Huaxing Technology Co., Ltd. and exchanged views with Lu Qiang, general manager of the company, and Qing Gele, minister of the sales department. Mr. Qing noted that market prices tend to be transparent currently with the development of the information industry. In this regard, Eric stressed that the flattening of market information is conducive to the development of the industry, and high-quality products and service are enterprises’ core competitiveness. Eric also introduced the efforts made by Asian Metal to expand its service scope. Mr. Lu fully affirmed the authority and leading position of Asian Metal in providing information concerning the rare earth market, and gave advice on holding conference and providing information service. Accompanied by Mr. Lu who expressed his support to the 9th International Rare Earth Summit to be held on May 11-12, 2017 in Shanghai, Eric visited the mixing powder and sintering workshops.

In the afternoon of December 29, Eric visited Baotou Jingrui New Materials Co., Ltd. and exchanged opinions with Zhang Ruixiang, vice general manager of the company. Mr. Zhang mentioned that their company mainly processes Sm-Eu-Gd concentrate for Northern Rare Earth Group at the moment. In addition, they also produce anhydrous lanthanide and cerium trichlorides with an annual output of around 40t. Eric explained the national reserve and commercial storage of europium oxide as well as the price trends of gadolinium oxide, terbium oxide and dysprosium oxide. Accompanied by Mr. Zhang, Eric visited extraction lines of europium oxide and other products later.

On December 30, Eric visited Baotou Tianhe Magnets Technology Co., Ltd., Baotou Hailiang Technology Co., Ltd. and Baotou Jinshan Magnetic Material Co., Ltd.

In the morning of December 30, Eric visited Hailiang Technology Co., Ltd. and exchanged views with Pang Tiejun, vice general manager of the company. Mr. Pang revealed that their company produced around 1,000t of polishing powder in 2016. Currently, profit margins obtained from the fluorescent powder business are slim and user demand tends to differentiate with customized products being preferred. He added that prices have rose slightly with raw material prices moving up since November and suppliers have a greater say in the market now. Eric gave a detailed explanation of the production of fluorescent powder in Baotou, subsidy to LaCe products as well as freight costs. Mr. Pang disclosed that the subsidy give by Northern Rare Earth Group could be classified into three grades (based on the content of rare earth oxides): subsidy of RMB1 million to procurement of more than 1,500t; subsidy of RMB2 million to procurement of more than 3,000t; subsidy of RMB3 million to procurement of more than 5,000t. The company will get a subsidy of RMB1 million from this standard.

In the afternoon, Eric visited Baotou Jinshan Magnetic Material Co., Ltd. and exchanged views with Ren Jianyuan, purchasing manager of the company. Mr. Ren revealed that their company had just finished the annual meeting. He added that the current situation of rare earth magnet market remains grim and he is still seeking new ideas for cost reduction. Eric pointed out that metal producers have been in a passive position for a long time and see low rates of profits in view of raw material consumption, power consumption, recovery rate, labor and financial costs.In addition, the majority of domestic metal factories are facing the risk of capital return and market price fluctuations. Mr. Ren said their company produced about 1,000t in 2016 and plans to increase monthly output to around 100-120t in H1 of 2017. Eric said he would maintain close contact with Jinshan Magnetic Material and give advice on supplier selection and market outlook.

Stepping past by 2016, Asian Metal will continue to focus on self-improvement and actively offer advice for the rare earth industry and escort the development of rare earth enterprises in 2017.