Q&A: China's Grirem sees new energy aiding RE prices

China's rare earths market is facing mixed prospects as the impact of the Covid-19 pandemic has hit the global economy and manufacturing activity. The rapid growth in the new energy sector is expected to boost the rare earths market this year, although Covid-19 has dampened demand within and outside of China, Chinese producer Grirem Advanced Materials general manager Yu Dunbo told Argus. Edited highlights follow:

Could you give a brief introduction about your company?

Grirem Advanced Materials has an integrated industry chain from rare earths mining to rare earths functional materials. Our main products include rare earth compounds, metals, alloys, magnetic materials, luminescence materials and target materials. Our total capacity of rare earth products exceeds 15,000 t/yr.

Grirem has been growing rapidly in the past three years, with around 6,000 t/yr of average sales volumes and a 10pc annual rise in sales profits. Our company mainly sells praseodymium-neodymium metal, neodymium metal, samarium metal, terbium metal, ferro-dysprosium, neodymium-iron-boron alloy and LED phosphor to major domestic customers and well-known overseas companies in Japan, South Korea, Europe and the US.

Light, medium and heavy are earth prices have been increasing since mid-May driven by tight spot supply and expectations of national stockpiling drive. What is your view on the current rare earths market and main downstream demand?

Generally speaking, the rare earths market is in a balanced state between supply and demand, and an oversupply in some rare earths products prevent prices from rising much. The Covid-19 outbreak resulted in shutdowns and delays in output restarts at some separation and processing plants during January-February. The rise in domestic orders following production resumption at main downstream producers has offset a fall in export demand amid the global pandemic.

An expected stockpile purchase and higher bids from major rare earths groups have been lifting dysprosium and terbium prices, while a gradual increase in spot supplies is forecast to keep prices from rising too much in the near term.

The government has taken various measures to boost the development of the new energy industry including new energy vehicles (NEV) and wind power. What do you think about the impact on the rare earths market?

China's government has taken measures to boost domestic NEV sales and alleviate the economic slowdown amid the worsening Covid-19 outbreak globally. The rare earths market will turn into the competition of new energy, new concepts and new fields. Grirem, as the industry pioneer of environmental protection and energy saving, will become the leader of the new trend.

Which effective measures do you take to alleviate the pressure from the Covid-19 outbreak?

We have made full preparation and rapid response to guarantee output restarts smoothly. Our rare earths production has not been affected by the Covid-19 and we have received more orders within and outside of China.

China's rare earths exports are dropping amid the spread of the Covid-19 outside of China. How about your export business?

We keep in touch with our overseas customers, local customs, quarantine department and logistics firms closely to make shipments for urgent requirements in priority. Our company has received more export orders because of timely delivery and high-quality products.

What's your outlook about the rare earths market over the next few months?

The rare earths market is expected to face downwards pressure amid lower consumer demand and a fall in export orders if the Covid-19 pandemic outside of China continues to worsen.

How about your company's future plan?

We will continue to explore and develop rare earth magnetic materials, luminescence materials, catalytic materials, high-purity rare earth metals and special alloys. Meanwhile, we will improve rare earths resource utilising rates and promote healthy and sustainable development of the rare earths industry.

We will actively extend the rare earths industry chain, strengthening co-operation with the whole industry and society and provide high-quality products and services.

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