Asian Metal: Mr Che, please tell us something about your company.

Che: Our company was founded in 2011 and put into regular production in 2013. Our main products are metallurgical grade tantalum oxide, metallurgical grade niobium oxide, ferroniobium and potassium fluotantalate. The total capacity for oxides is 300tpy. We produced 100t in 2013 and 120t between January and October in 2014. It is predicted that we will produce 150t this year. We are able to produce 3-4tpm of metallurgical grade tantalum oxide, 10tpm of metallurgical grade niobium oxide and 70-80tpy of ferroniobium. We only produce potassium fluotantalate to order with a capacity of 20-30tpm.

Asian Metal: What about your plan for Q4?

Che: We will maintain normal production in Q4. As demand remains soft and orders are limited, we will reduce our production accordingly. We pretty much have relatively sufficient tantalum and niobium ore stocks in hand, so have no plans to rebuild stocks in bulk this year.

Asian Metal: Now that tantalum concentrate prices are on the decline, do you have plans to rebuild stocks in the near term?

Che: We have already had stocks for three or four months, so we don’t need to purchase raw materials in the near future. As the tantalum downstream market remains soft while overseas quotations are high, we are cautious about making purchases. However, if tagged tantalum concentrate prices drop to USD70/lb or lower, we will consider importing 2-3 containers for storage.

Asian Metal: What is the real reason for the prices of domestic tantalum products being turned on their head?

Che: Taking the transportation and production cycles into consideration, tantalum product prices lag behind tantalum concentrate prices. However, most buyers tend to use current tantalum concentrate prices to calculate tantalum products’ prices, which leads to there being some difference in the prices and actual production costs. As a tantalum and niobium smelter in China, we have to predict the future ore prices accurately and arrange production according to market demand, then we can make profits despite the current unfavorable situation.

Asian Metal: At present, downstream industries remain subdued. What’s your view on the prospects for the tantalum capacitor, alloy and optical glass industries in the future?

Che: Demand from the tantalum capacitor market will remain relatively stable rather than decrease sharply in the near term. As high pixel mobile cameras grab some of the market share from DSLR cameras, demand for optical niobium and tantalum oxide from the optical glass industry will reduce to some extent. We are not optimistic about the optical sector. As for tantalum metal, as it is one of the most important materials used in the aerospace and medical areas, the prospects are bright. In addition, the electromagnetic industry will require electronic grade niobium oxide and some special steels will need to have elements like tantalum and niobium added. The applications for tantalum and niobium will expand as people search for better quality advanced materials and products in the future.

Asian Metal: What’s your opinion about the oversupply in the Chinese tantalum and niobium market? Do you have any plans to expand your business and enhance your competitiveness?

Che: Firstly, the oversupply is only relative. Most plants simply arrange production according to orders received and only have small spot stocks in hand. As demand remains weak, suppliers are having difficulty in concluding deals and the market seems to be witnessing an oversupply. I think we should improve the management from production through to marketing operations. Secondly, it doesn’t make sense to expand production lines. We need to arrange production according to actual orders and demand. Thirdly, it is important for us to predict future market developments and make medium-to-long-term plans.

Asian Metal: What about the market in H2? What will conditions be like in the next two months of 2014?

Che: Downstream demand remains sluggish, which has led to prices falling, just like last year. However, I don’t think the prices of tantalum-niobium products will go down sharply after the TIC summit. Chinese insiders in the tantalum and niobium market are being relatively rational this year. At the same time, end users are showing stable consumption which will support current prices. As the cemented carbide industry appears soft, demand for tantalum carbide shows no signs of rebounding; consumption from the optical glass and tantalum capacitor sectors will remain at a low level. However, demand from new materials for tantalum metal will pick up slightly at the end of this year, and the tantalum oxide and tantalum ingot markets will become better in the future.

Asian Metal: Thank you for accepting the interview. We wish your company a prosperous future.