Abstract: The technical parameters for reclaiming hydrochloric acid, such as reaction temperature, the density of concentrated acid, air-gas ratio volume, quality of rinsing water etc on the quality of ferric oxide powder (by-product) were investigated.The reasonable technical parameters were put forward to ensure the quality of ferric oxide powder. The experiment to trial-produce magnetic material from ferric oxide powder was carried out at Pangang.The results show that the high grade permanent magnet can been made from the ferric oxide powder.The quality of the permanent magnet comes up to or surpasses Y30H-1 standard (SJ/T10410-93 standard).