Longci Technology: Strontium carbonate prices have surged significantly, and the company has already engaged in strategic centralized purchasing.

Longci Technology recently stated during institutional research that the main raw materials required for the company's magnet production are iron red and strontium carbonate. Iron red is a by-product of the steel production process, and China is a major producer of steel with relatively abundant supply of iron red and minimal price fluctuations. Strontium carbonate is also an important raw material for the production of ferrite permanent magnets. Iran has the highest reserves of high-grade celestite in the world, and although China has high reserves of celestite, the overall grade is low and the extraction cost is high, leading to a high dependence on imports. Due to the impact of the US-Iran conflict, the price of strontium carbonate has significantly increased. The company has always maintained dynamic reserves of raw materials for safety stock and strategically procured strontium carbonate. This was a major reason for the high book value of raw material inventory at the end of the previous year, which has provided us with a valuable buffer period. It is expected that the impact on the company's permanent magnet raw material supply and costs will be minimal in the near future. However, if the conflict continues for a long time and there is a shortage of strontium carbonate, it may put pressure on the stable production and order delivery of the entire ferrite permanent magnet industry. We continue to maintain close communication and coordination with suppliers and customers, actively evaluate and layout diversified supply channels to ensure the long-term security and resilience of the supply chain.