Asian Metal: First of all, thank you for taking the interview with Asian Metal. Would you please give us a brief introduction about the latest development of your company?

Zhou: We mainly produce various types of tungsten powder and tungsten carbide powder (WC powder) and are currently operating at nearly full capacity with an expected gross annual output of 3,300-3,500t. Our recent monthly output was closed to 300t and we received relatively more orders in Q2 when sales increased to some extent.

Asian Metal: Market prices for tungsten concentrate and APT rebounded recently. What are the actual reasons behind these? Will it have an impact on prices for tungsten carbide?

Zhou: The inspections for environmental protection have lead to suspension and reorganization at some small and medium sized mines. At the same time, mining enterprises have been seeing losses over the recent years with low operating rate and limited market supply. So the increased raw material prices this time was not the result of speculation. However, we will certainly adjust prices for tungsten carbide accordingly and supplement raw material constantly for the dynamic balance of the market. Considering that July and August are still the traditional slack market for hard alloy industry and prices will hardly be heavily supported by end-demand, we predict that this round of increases in prices won’t last long.

Asian Metal: The current Chinese medium grain tungsten carbide market sees fierce competition, so what is your strategy for promoting transactions and securing limited orders?

Zhou：Our current main products are fine grain, ultra-fine grain and coarse granule tungsten carbide, not medium grain tungsten carbide. Currently, our output of medium grain, coarse granule and fine and ultra-fine grain tungsten carbide account for 10-15%, 15% and 70% of the gross output respectively. For fine grain tungsten carbide, 60% of the output is for domestic sales and 40% is for export. We aim to find medium and high customers with good reputation and high-quality products for long-term cooperation. We focus on the quality of products instead of prices.

Asian Metal: The demand from downstream hard alloy market is generally stable this year. >From the views of actual sales, what are the changes in the consumption of tungsten carbide compared with that of last year?

Zhou: Generally speaking, the consumption of tungsten carbide by tooling products increased to some extent, up by about 40-50% YOY; the abrasives industry also saw slight increased consumption; the diamond and hammer industries saw relatively small increases in consumption as the demand was stable and barely changed from last year.

Asian Metal: What is your plan for the company’s future development and what are your advantaged products in the future? Do you have any plan about expanding production?

Zhou: We do plan to expand powder capacity by 1,000-2,000t this year and our new production line will formally go into operation late this year with total capacity expected to reach 4,000-4,500t in 2018. This new production line is of higher level of automation and is installed with more advanced equipment, and will mainly produce high-quality fine grain tungsten carbide in the future. At the same time, our long-term strategy is to extend the industrial chain. On one hand, we will strengthen cooperation with upstream tungsten concentrate producers both at home and abroad, in order to guarantee a sufficient raw material supply; on the other hand, we might expand our business to downstream hard alloy industry or put hard alloy production line into operation which will mainly produce downstream products like cutting tool.

Asian Metal: China’s medium grain tungsten carbide market is still facing the problems of tight raw material supply and weak demand currently. What do you think is the way to improve this situation?

Zhou: By strengthening communication and expanding supply channels. We should not only the communication and cooperation with the existing domestic miners, but also with overseas suppliers with stable and reliable supply source.

Asian Metal: With the coming of summer break, overseas market tends to be quite. At the same time, raw material prices begin to increase in Chinese market but consumers mostly put off the purchase of large amount. What do you think the price trend for tungsten carbide would be in Q3 both at home and abroad? Do you have any plan to adjust output and safety inventory?

Zhou: Prices for tungsten carbide edged up in early Q3 as the market saw tight raw material supply. However, the market will gradually see prices return to rational levels and won’t soar continuously due to relatively weak end-demand in August and September. The current Chinese tungsten carbide market sees both weakened supply and demand. In addition, our orders have been scheduled to late September and we are operating at nearly full capacity. Therefore, we continue to make purchases of raw material based on orders and will adjust prices accordingly on the basis of raw material prices.

Asian Metal: Thanks again for taking our interview, and wish a more prosperous future for Xianglu Tungsten Co., Ltd.