Suspensions with permanent magnetic particles are widely used in various applications. In this study, we are interested in magnetic powder injection molding (PIM) to mass produce small and precise magnetic components. Magnetic PIM consists of four processes: mixing, injection molding, debinding, and sintering. To achieve a desired magnetic property in injection-molded parts, it is of great importance to predict the particle orientation during cavity filling stage. In the presence of an externally applied magnetic field and continuous shearing, the orientation distribution of the particles determines the final magnetic property of the molded parts. As a first step toward developing an orientation model for the magnetic PIM, we present a direct simulation scheme to solve a magnetic particulate flow with permanent magnetic particles suspended in a viscous fluid. In this scheme, the entire domain including the particles and the fluid is chosen as a computational domain. A fictitious domain method based on the finite element method is employed to treat the rigid body motion of the magnetic particles. Result on the dynamics of the particles in a shear flow is presented, focusing on the effect of two forces, the viscous forces and the magnetic interactions among the particles.