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

6th World Antimony Forum

April 23-24, 2018
Zhangjiajie, China

6th International Refractories & Abrasives Summit

April 19-20, 2018
Beijing, China

Interview with Mr. Liao Xingeng, Chairman of Jiangxi Rare Earth & Rare Metals Tungsten Group Imp. & Exp. Co., Ltd.

Jiangxi Rare Earth & Rare Metals Tungsten Group Imp. & Exp. Co., Ltd. was established in March 2005, and it is a Jiangxi Tungsten Corporation (JXTC) wholly owned subsidiary. JXTC is one of the Jiangxi large-scale industry groups, and it is one of the biggest tungsten production industry groups in China, as well as the first batch of companies being approved by the Ministry of Commerce of the People's Republic of China for exporting tungsten products and supply in export market. The Imp. & Exp. Co. Ltd, as the window for the JXTC Group’s international trade and also key export enterprise in Jiangxi Province, it is in charge of distributing and using the JXTC export quota of tungsten products, bismuth ingot, molybdenum, tin, and rare earth, as well as importing strategic products.
Tungsten export market to improve next March
----Interview with Mr. Liao Xingeng, Chairman of Jiangxi Rare Earth & Rare Metals Tungsten Group Imp. & Exp. Co., Ltd.
Asian Metal: Hello, Mr. Liao, thank you for your support to Asian Metal and accepting our interview. JXTC is one of the largest corporations in tungsten industry in China, and the corporation has always been leading the market, and the JXTC Imp. & Exp. Co., Ltd. plays an important role in the export market.
Mr. Liao: First, we would like to commend Asian Metal for using its platform to keep many businesses informed of the accurate situation in the metals market over the past years. JXTC Imp. & Exp. Co., Ltd. has grown and developed rapidly in the last few years, and we cannot do it without the rapid expansion of our Group companies, or without the brilliant leadership from our management, or without support from customers in our industry. Hereby, I am representing everyone in our company, to express our deep gratitude and sincere wishes. Also I would like to invite everyone to visit Nanchang, to the beautiful mountains and rich lands. We look forward that we will continue gaining support from friends in the industry, including Asian Metal, and hope we can take the cooperation a step further.
Asian Metal: From the end of 2008, financial crises had big impact to the tungsten market: international consumers stopped purchasing, price of tungsten products dropped sharply. Many small and mid-scaled manufacturers were forced to close down. In the last two months, from the beginning of November, raw material prices started moving higher, demand in both domestic and overseas market showed signs of recovery. Can you please briefly discuss about the macro economy and the business environment.
Mr. Liao: Some economists say that Chinese economy is moving in the second half of a “V” shape now. Since the beginning of November, we have seen global economy showed signs of improvement. From the Customs statistical data and our own archive, export market is slowly improving, but it will take some time for us to see fully recovery. Government economic summit has decided that the proactive fiscal policy and loose monetary policy will be carried into 2010 to stabilize growth, adjust structural and promote consumption, so to ensure economic stability and continuity, and to keep 8% GDP growth rate. Increasing domestic demand will still be the most important work for government next year. 2009 is the most difficult time of this world economic crisis, it is now already passed and we are stepping into 2010, a year full with hope. We believe spring is not far away when winter is over.
Asian Metal: From July 1 in 2009, Chinese government lowered the export tariff of APT and some other tungsten products from 10% to currently 5%. Can you help us to read the government policy on the export market of APT?
Mr. Liao: When government imposes duties on commodities, it considers the need to regulate macro economy as well as the need to conserve strategic resources. JXTC Group has the longest production chain of tungsten in China and we are one of the biggest provinces owned corporation, we fully support the government export policy.
Asian Metal: We all know that ferrotungsten is one of JXTC products. With 20% export duty, Chinese ferrotungsten is not competitive in the overseas market against Vietnamese material, especially in European market. According Chinese Customs’ export data, China exported 4,835t of ferrotungsten in 2008, and 4,593t in the first 10 months, and the figure was 1,084t in the first 10 months of 2009, decreased by 76% year on year. This is not only caused by economic recession, but also due to the restriction of export policy. Many people think that Chinese government should cancel the 20% export tariff to help Chinese producers to compete in the international market. How do you feel?
Mr. Liao: A lot of people think that the 20% duty should be cancelled, because they are taking the view from individual’s point. As you mentioned, the 20% export duty had put great pressure on our export companies as the cost of production increases, and also resulting more production corporations set plants outside China. From the Chinese Customs’ export data of ferrotungsten in 2009, we see the volume and prices decreased greatly, and it had major impact on tungsten market and confidence of the industry. However, we believe that government policies are made after taking due and exhaustive considerations of all aspects, and it will adjust according to real market situation.
Asian Metal: Right now, many people feel that some tungsten concentrate producers are holding off from selling, causing price of raw material to keep rising. But the demand of downstream products is still dull and cannot support the uprising prices, so people lack confidence in the future market. JXTC is a Group Corporation, that the production chain is long, including raw material like tungsten concentrate to end products. Can you briefly describe the production and sales situation, and also the stock level and operation strategy?
Mr. Liao: As I know it, the stock level of most tungsten products in the market is in the normal level. The stock is build for two reasons at present: first, price is up for some products, and second, it is normal for some company to keep stock at the end or the beginning of a year. My personal opinion is that the total consumption of tungsten is normal in 2009 compared to that of past years. Moreover, according to the data we have, the stock level in the spot market right now is lower than that in the past years.
Asian Metal: For people outside tungsten industry, they think of light bulb first when they hear tungsten. In fact, lighting is a very small part of tungsten usage, and keeps reducing as many countries are eliminating the usage of traditional light bulb. The most usage of tungsten is from the cemented carbide industry. Will you shortly summarize the applications of tungsten, and for which market you feel that there is room to expand?
Mr. Liao: That is correct, tungsten used in lighting is getting less as many countries are promoting energy-saving LED, and this is a very small application of tungsten. Cemented carbide had been the largest usage of tungsten in many years, and it is also used in electronics, healthcare, petroleum production, and other field. I think there is more room for the latter three to expand in the future.
Asian Metal: When economic situation is normal, foreign companies invest big money in new technology research and development. Can you introduce a little about JXTC’s investment in technology innovation and products upgrade?
Mr. Liao: JXTC acknowledges great importance of innovation, energy saving technology, and invention on new products, new equipment, and new technology. We invest heavily on upgrading products research and development, to enhance production efficiency, strengthening corporate core competitive ability. After few years of self-pressurizing, our productions of hard-facing material, high-end tungsten wire, CNC blade and orthogonal anisotropic materials are developed in large scales, and this is also one of our strategies.
Asian Metal: Due to the economic recession, tungsten market did not run well in 2009. Sales volume and price of tungsten products both lowered greatly in the domestic and export market. To be one of the largest companies in tungsten industry, how did JXTC achieve its goal? Are there any difficulties, and how did the corporation solve the problem? Is there any special plan for year 2010?
Mr. Liao: The first half of 2009 was the most difficult time for us, and we worked very hard in the second half of the year, so our annual total import and export was about the same as that of 2008. The total value of import and export of our company was USD200 million, and this figure is more significant in 2009, under the financial crisis. This is the result of everyone’s hardworking in our company. We anticipate that market will improve from March 2010, and the overseas market will recover greatly in the second half of the year.
Asian Metal: Please make a forecast of the market in short-run.
Mr. Liao: It is holiday season in overseas market, and many domestic companies will overhaul in January; market will be less active. As I said earlier, market will gradually turn better from March 2010.
Asian Metal: Is there anything you want to say to other companies in tungsten market?
Mr. Liao: I hope manufacturers in tungsten industry will build up confidence, and we can overcome the difficult time together. I believe the cold winter is over and warm spring is already close.
Asian Metal: We hope JXTC will continue to lead tungsten industry in the future, and achieve new breakthrough.
Mr. Liao: Thanks; we have always tried our best. Using this opportunity, I would like to wish everyone who care and support the Chinese nonferrous industry a happy New Year and good health!