Chines black silicon carbide market recovers in Q4
----Interview with Bin Lin
General Manager
Inner Mongolia Shenhong New Material Technology Co., Ltd.
General Manager
Inner Mongolia Shenhong New Material Technology Co., Ltd.
Located in Ulanqab, Inner Mongolia, Inner Mongolia Shenhong New Material Technology Co., Ltd. is a producer integrating smelting and processing of black silicon carbide with an annual production capacity of 36,000t. They mainly provide black silicon carbide natural lump, refractory grade segment sand, fine powder and abrasive grade grain sand for clients both at home and abroad.
Asian Metal: Thanks for accepting this interview, Mr. Lin! Would you please introduce your company?
Mr. Lin: Inner Mongolia Shenhong New Material Technology Co., Ltd. was set up after getting approval of the Industry and Information Technology Committee of Ulanqab. With a total investment of RMB100 million (USD14.67 million), our company is a black silicon carbide producer with an annual production of 36,000t of black silicon carbide. We officially put into operation in March 2019, mainly focus on black silicon carbide smelting and processing. Based on advanced energy conservation and environmental protection facilities, we have two 18,000kVA black silicon carbide smelting furnaces and two processing lines with ramon grinding and air grinding, which can process segment sand, fines, grain sand and micro powder.
Asian Metal: Please introduce the price trend of black silicon carbide market since early this year and analyze the main reason.
Mr. Lin: Since early 2020, the prices of black silicon carbide showed a downward trend. Due to COVID-19, the operating rate of the downstream steel mills and automobile plants both at home and abroad kept low with a weak demand. Meanwhile, the black silicon carbide faced overproduction and high inventories due to the dim market. Therefore, the suppliers had to keep cutting prices to win more orders.
Asian Metal: What are the major challenges in the current black silicon carbide market?
Mr. Lin: In addition to problems of oversupply and soft demand which have already existed, the black silicon carbide industry has been witnessing the problems caused by the outbreak of COVID-2019 worldwide since early 2020. Now the demand from domestic market is gradually recovering, but the export market remains dim as COVID-19 keeps serious in foreign countries.
Asian Metal: How about the demand for black silicon carbide in major consuming countries at present?
Mr. Lin: Now COVID-19 has not been completely controlled in foreign countries, resulting in the sluggish demand in overseas market. Chinese black silicon carbide raw materials and products mainly export to Europe, America, Japan and South Korea, etc., where downstream consumers hold high inventories and low operating rates with weak demand.
Asian Metal: What about the operating rate, spot supply of black silicon industry currently?
Mr. Lin: At present, most black silicon carbide plants in Northwest China keep production, but could not reach full operating rate. Some plants in suspension plan to resume production in Q4. Stocks reduced significantly from the first half of this year, but can fully meet the current market demand.
Asian Metal: Some suppliers are raising their prices at present. How do you think of the price trend in Q4 2020?
Mr. Lin: Since Q3, the demand of steel mills at home market resumed. Therefore, the domestic market saw a significant increase both in deal frequency and volume, as well as a significant reduction of inventory compared with the first half of this year. However, due to the sufficient supply and the weak demand as the epidemic abroad has not been fully controlled, the price would not rise significantly. So I predict the prices of black silicon carbide would keep almost stable and rise slightly in Q4.
Asian Metal: How did you deal with the impact by the COVID-19?
Mr. Lin: We changed the price and customized products according to customers' demands in a timely manner to provide good service. Despite the weak demand and low profit this year, our business volume has not declined so far and we kept zero inventories for a long time.
Asia Metal: What are your future plans and goals?
Mr. Lin: We will strive to improve the technology and the quality of products to provide high-quality services for clients. We would put into another production line of black silicon carbide at the end of this year and upgrade the processing line next year to provide customers with more diversified and high-quality products.
