12th Rare Earth Summit

May 27-28, 2021
Hangzhou, Zhejiang, China

11th Aluminum Raw Materials Summit

May 20-21, 2021
Hangzhou, Zhejiang, China

9th Magnesium Summit

April 15-16, 2021
Hangzhou, Zhejiang, China

13th World InBiGeGa Forum

March 25-26, 2021
Hangzhou, Zhejiang, China

7th World Antimony Forum

June 13-14, 2019
Changsha, Hunan, China

7th Refractory & Abrasive Materials Summit 2019

May 23-24, 2019
Qingdao, Shandong, China

10th Aluminum Raw Materials Summit

May 16-17, 2019
Zhengzhou, Henan, China

11th Rare Earth Summit

May 9-10, 2019
Qingdao, Shandong, China

8th Magnesium Summit

April 11-12, 2019
Zhuhai, Guangdong, China

12th World InBiGeGa Forum

March 14-15, 2019
Zhuhai, Guangdong, China

6th World Manganese & Selenium Forum

May 21-22, 2018
Hainan Sanya, China
Traders still play indispensable role in Chinese ferrosilicon industry
----Interview with Yin Ning
General Manager
Ningxia Zhongtai Industry and Trade Co.,Ltd.
Zhongtai Industry and Trade co.,Ltd was established in 2010 and located in Jinxin Industry zone, Zhenluo county, Ningxia, where many ferrosilicon plants scattered around. Zhongtai has one furnace of 31,000kVA and one of 18,500kVA in total currently, and they're conducting upgrading for the later one since late August. They mainly focus on ferrosilicon 72%min 10-50mm and 72%min unprocessed lump production and mainly supply ferrosilicon through traders to foundries and steel mills.

Asian Metal: Thank you for joining our interview, Mr. Yin, please introduce your company briefly first.

Mr. Yin: Thank you for having me here. Zhongtai Industry and Trade co.,Ltd was established in 2010 and located in Jinxin Industry zone, Zhenluo county, Ningxia, where many ferrosilicon plants scattered around. We have one furnace of 31,000kVA and one of 18,500kVA in total currently, but we're conducting upgrading for the later one. We mainly focus on ferrosilicon 72%min 10-50mm and 72%min unprocessed lump, and we mainly supply ferrosilicon through traders to foundries and steel mills.

Asian Metal: Please introduce your current annual capacity and monthly output. How about that after the upgrades?

Mr. Yin: We have one furnace of 33,000kVA and one of 18,500kVA in total, and the output in regular production could reach 55,000tpy with 4,500ptm. And we run two furnaces in off-peak production before the end of August with the output around 3,500tpm. We got the approval from the government to do upgrading and reconstruction early this year, and we're conducting the upgrades for the furnace of 18,500kVA into 33,000kVA. It takes around five months and the output could reach 6,000t after the upgrading. As we have sufficient orders from regular clients and increasing orders from new clients, so we determined to enlarge output.

Asian Metal: what are your advantages regarding ferrosilicon quality and service as one of the major ferrosilicon plants in Jinxin indursty zone in Ningxia?

Mr. Yin: First of all, we always have sufficient cash flow. We don't account on over pre-sold clients' pre-payment to purchase raw materials, so we seldom come across shipment delay. Even though some exceptional cases happen, we would negotiate with clients in advance.
Secondly, from our clients' feedback, the purity of Si could mostly reach 73%min for our standard product ferrosilicon 72%min. Besides, we hardly hear from the clients that our ferrosilicon 72%min product is powdered.

Asian Metal: The silica ore minerals were under safe production inspections in Qinghai in the middle of August. Does it impact the supply of silica ore to your plant? How about the silica ore prices from your suppliers? How about other raw materials purchase cost?

Mr. Yin: We always keep around silica ore inventory for six months' consumption, and the price of silica ore didn't change. We usually purchase from Jingtai, Gansu, and the current price is RMB120-140/t (USD17-20/t) delivered d/p. The inspection in Qinghai didn't bring much effect to the mining in Gansu and Inner Mongolia. Regarding other raw materials, semi coke price stabilized at RMB750/t (USD110/t) delivered d/p from Fugu, Shaanxi, and the oxidized Iron sheet prices increased slightly by RMB100/t (USD15/t) to RMB1,100-1,200/t (USD160-175/t) delivered d/p. Generally speaking, the production cost of ferrosilicon 72%min keeps stable.

Asian Metal: According to Asian Metal database, the ferrosilicon demand from steel mills reached around 370,000t in July, and about 160,000t of the material in total were supplied directly to steel mills by producers. That means there is still about 200,000t of ferrosilicon originated from Qinghai, Ningxia sold through traders to end market. Along with the more and more transparent prices and narrower profit for traders, will you consider supplying to steel mills directly in the future?

Mr. Yin: All of our current clients are traders. After the COVID-19, particularly in September, most traders' purchase volume slightly increased. On the one hand, the demand from steel mills keeps solid; on the other hand, the profit for traders in September is slightly higher than August, so our clients placed orders actively. For our long-term cooperating clients, we could give reasonable discounts to support them to win tenders from steel mills even under the tight spot supply circumstances.
Most steel mills usually pay after receiving and inspecting, which bring heavy capital pressure for most ferrosilicon plants. Secondly, their inspection standard sometimes is self-oriented which easily bring disputes based on different standard from buyers and sellers. Therefore, traders' value can't be replaced at the time being, but traders with sufficient fund would place more and more important role between steel mills and ferrosilicon plants. So we don't supply to steel mills directly at the moment. But for steel mills who could do prepay and also accept the inspection standard admitted bilaterally, we still can consider in the future.

Asian Metal: How do you evaluate the ferrosilicon market demand in Q4 2020?

Mr. Yin: For the purchase volume from clients, our regular clients maintain stable purchases, which accounts around 80% of our monthly output, and most traders who didn't place orders in August purchased in September. About 20-30% of monthly output was booked by new clients, and inquiries from new clients are increasing. We sold out all the output of September in late August. September and October are traditional bullish market for steel products. Additionally, Chinese government drives domestic demand aggressively. I believe the operation rate for steel mills would keep high in Q4, and the demand of ferrosilicon in Q4 would remain strong.

Asian Metal: What's your new plan or business direction for your company in the future?

Mr.Yin: From February 2020, our monthly output could reach 5,500-6,000tpm after the upgrading, and we will focus on selling the increased output sustainably by maintaining regular client and developing new clients. We don't have plans to produce ferrosilicon 75%min or do export at the time being.

Asian Metal: Thank you, Mr. Yin

Mr. Yin: Thank you.