Asian Metal: Hello, Mr. Zhao! Thanks for accepting Asian Metal's interview. Would you please offer a short introduction of your company firstly?

Mr. Zhao: Established in 2004, Ningbo Tongchuang Strong Magnet Material Co., Ltd. is a national high-tech enterprise, which covers an area of 41,000 square meters and owns an annual production capacity of 3,500t of NdFeB magnet. Our company also owns strong research and development capabilities and enterprise postdoctoral workstation. We cooperate with a number of scientific research institutes. Our products' performance is leading in the industry. Our products are mainly exported to overseas market.

Asian Metal: Ningbo is one of the major manufacturing bases, so I could image the furious competition among magnet producers. Would you please introduce your company's major advantages? How does your company survive and develop in the cruel competition?

Mr. Zhao: Our company always focuses on innovation, pays close attention to improving quality, and highlights diversified competition. We have advantage on cost-efficiency of high performance products and we are one of a few enterprises which can produce radiation ring in large-scale. We are leading the industry in products of low weightlessness, low temperature coefficient, low magnetic declination, etc. The above advantages help our company survived and developed over the past years.

Asian Metal: Chinese NdFeB magnet industry was dim in 2018. Although new energy vehicle industry develops rapidly, it is not as fast as expected. The majority of NdFeB magnet producers disclosed that their orders decreased YOY in last H2. May I know how about your production and operation situation in 2018?

Mr. Zhao: Our NdFeB magnet output in 2018 was around 1,500t, without much change YOY. Our sales revenue in 2018 rose by 9% YOY. The demand for the material from the new application fields increased, offsetting the shrinking demand from some traditional downstream industries. The demand from intelligent manufacturing, servo control motor and sensor industries rose, while the demand from wind power, new energy automobile motor, industrial motor, elevator markets reduced obviously due to policy change and the trade war between China and U.S.

Asian Metal: Would you like to share your development plans in the next few years?

Mr. Zhao: Our development plans in the coming years are as below: Firstly, we will improve the automation, informatization and intelligentization of production and management system. Secondly, we will keep highlighting diversified competition to satisfy customers' requirement. Thirdly, we will continue to increase investment in research and development, innovation and create advantages in order to make sure the steady and healthy development of our company.

Asian Metal: As far as we know, China's NdFeB magnet output in 2018 decreased slightly YOY. Would you like to share your opinion on this? How do you think China's NdFeB magnet output in 2018?

Mr. Zhao: In my opinion, China's NdFeB magnet's output in 2018 declined by around 8% YOY to around 120,000t. The output in H1 of 2018 increased but decreased obviously in H2. As far as I know, most major Chinese NdFeB magnet producer's output didn't change a lot in 2018 while some small and medium-sized companies' orders reduced as high as 40-50% in H2 of 2018.

Asian Metal: May I know how do you predict China's NdFeB magnet industry in 2019? How much do you think the output would be?

Mr. Zhao: I am a bit pessimistic about Chinese NdFeB magnet industry in 2019 due to the dim economy outlook. I think China's NdFeB magnet output in 2019 would decrease by about 4% YOY to around 115,000-120,000t.

Asian Metal: Chinese rare earth industry was active in early last year but became dim in H2 of 2018. Taking PrNd mischmetal prices for example, the price rose in last Q1 but showed a declining trend in general in Q2, Q3 and Q4, except in May. May I know what impact this brings to your company? How about your NdFeB magnet price trend in 2018?

Mr. Zhao: In theory, although there is a bit of lag of fluctuations in NdFeB magnet prices, prices of the material fluctuate along with rare earth raw material prices, so our NdFeB magnet prices showed a downward trend generally last year. In fact, even though when rare earth raw material prices are rising, it's really hard for us to increase magnet prices due to the furious competition among suppliers.

Asian Metal: Affected by the strict environmental inspection in China and the reduction of ore from Myanmar, Chinese ionic rare earth ore supply is tight now. Most insiders predict that prices for heavy rare earth products like dysprosium and terbium would go up a bit in 2019. Considering the low price level of light rare earth products, market participants forecast that rare earth raw material prices for NdFeB magnet would show a relatively stable or slight upward trend in 2019. Would you please share your opinion on Chinese NdFeB magnet price trend in 2019?

Mr. Zhao: In my opinion, Chinese rare earth raw material prices would be impacted by policy and speculation in the short term, while it would be dominated by demand for NdFeB magnet in the long term. Frankly speaking, I lack confidence towards Chinese rare earth market in 2019, especially in H1. I think rare earth prices would show slight downtrend in H1 due to the weak demand from downstream applications. Taking the soft rare earth raw material prices and poor demand from end users into consideration, I predict that Chinese NdFeB magnet price would decrease a bit in 2019.