Asian Metal: First of all, please make an introduction of your company.

Mr. Li: Xiamen ITG Group Corp., Ltd., a subsidiary of ITG Holding, was established in 1980 and listed in Shanghai Stock Exchange in 1996 (stock code: 600755). For the past three decades, the company has developed and emphasized supply chain management, real estate operation, and financial service as its three core businesses and formed four major business divisions including supply chain, real estate, finance and strategic development. Silicon metal business has been a spot product in the bulk trading business under supply chain sector for more than 20 years, and has been at the forefront of the country for a long time.

Asian Metal: The export volume of Chinese silicon metal has decreased evidently in 2019. How is the situation of your company, and how do you deal with the changes of the market?

Mr. Li: In terms of the export volume of silicon metal, we met a huge decreased compared to previous year, because it was weighed by overall economic downturn. We can only optimize allocation in a limited space and allocate funds to other sections to maintain relatively reasonable returns.

Asian Metal: The situation of non-compliance of goods in the export market of silicon metal is getting worse. How does your company view this matter and what impact will it have on the export market in the future?

Mr. Li: According to communication with some downstream clients, some aluminum producers already tried to use 97% silicon metal. The major problem is that there is no explicit standard for 97% silicon metal currently, but it already brought an impact to the market of silicon metal 5-5-3 undoubtedly, and it is particularly evident in Japan and Southeast Asian countries. When there is a great opportunity, traders would be motivated to advocate the form of relevant standard.

Asian Metal: The finalized prices of silicon metal for the world’s leading aluminum producers were not good, how do you think it will impact the market?

Mr. Li: The finalized prices of the open tenders were not good in 2nd half of 2019. Suppliers, who kept stocks, were reluctant to close deals. The suppliers, who did not keep stocks, were struggling when the deadline of delivery was close. There is very limited room of profits for suppliers, therefore, the prices hovered at a low level.

Asian Metal: Export market is quite soft, when do you think it will get better?

Mr. Li: According the feedback and forecast from downstream consumers, the market may become better in the market of Europe and North America, and the export may get stronger following the increasing demand. In terms of prices, it will self-adjust according to the supply and demand, because many producers in Southern China would resume production following the coming of wet season by the end of Q2.

Asian Metal: The market prices had been weak through the whole year of 2019, what do you think is the main reason?

Mr. Li: The operation ratio was not high in 2019 in China, and the output was not big. However, the demand side was even weaker, which created a bias for low prices.

Asian Metal: Hoshine announced the plan to build a plant in Yunnan with keeping the current production capacity, how do you see this news?

Mr Li: There are some uncertainties, in particular to powder and raw materials supply. The electricity cost is not confirmed yet, the silica market will be impacted hugely both on the matter of prices and supply capacity. If Hoshine can be sure that they will have much lower production cost, it would be a fatal hit to silicon metal producers in Yunnan, and they would be able to survive otherwise.

Asian Metal: What impact will the development of organosilicon and silicon metal bring to the market?

Mr. Li: The organosilicon sector is relatively well developed, both in terms of price and profit, and in supply and demand. The companies in the industry are still relatively tacit, and there is no vicious competition. After experiencing explosive growth in the polysilicon industry, organic silicon may become the next spot of the market. As its demand increases, more silicon producers will switch from producing metallurgical silicon metal to producing chemical grade silicon metal.

Asian Metal: Thank you for your sharing, Mr. Li.

Mr. Li: Thank you.