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 Wang Xianmin, Board Chairman of Sanmenxia Mingzhu Group

Sanmenxia Mingzhu Group, one of the major smelters of brown fused alumina in China, commenced production on January 1, 2002. The company is located in Sanmenxia City, a growing urban city rich in water resources, electricity and minerals. Besides, the transportation is quite convenient. With three tiling ports of 4,000KVA and one furnace of 3,600KVA, we have an annual capacity of 40,000t of brown fused alumina. For the high and reliable quality, our products are in high reputation among our numerous customers in Europe, America, Japan, South Korea, and South Africa etc. Sanmenxia Mingzhu Group warmly welcomes customers from home and abroad for mutual cooperation and business development as we hold to our promise of “Superior quality with superior service” to customers.
Brown fused alumina market still facing severe challenges
----Interview with Wang Xianmin, Board Chairman of Sanmenxia Mingzhu Group
Asian Metal: Good afternoon, Mr. Wang! Thanks for accepting our interview. Firstly, what’s your idea about the Macro-economic situation?
Me Wang: Although Chinese government carried out a series of economic stimulus programs this year and there is some improvement witnessed in the market, Chinese steel market is still in some kind of oversupply. As 80% of brown fused alumina is mainly used in refractory market, the oversupplied steel market is challenging the brown fused alumina market, as the demand may be dramatically dampened. In a word, if the steel industry remains unimproved, no turning point will show up in brown fused alumina market in the long run.
Asian Metal: we often talked about economic recovery lately, but do you think it is the real recovery? What kinds of challenges remain?
Mr. Wang: I think there some problems that we cannot overlook. Many of the significant programs have run its course this year; so I do not think such a large sum of money will be put into the economic stimulus plan next year. If there is no obvious improvement in America, Japan and European countries, I do not think there will be improvement in brown fused alumina market. There are a lot of negative factors in brown fused alumina, and there are even some restrictions on brown fused alumina market transportation. Meanwhile, the production cost of brown fused alumina is increasing. The price of bauxite has been rising continuously. It has gone up by RMB50/t so far this month. The power tariff in our country is also on the upward movement. Therefore, the production cost of brown fused alumina will go up by at least RMB200/t. The burden of Chinese brown fused alumina smelters will be heavier and heavier. The present production operation rate in the market is below 70%, and this could continue shrinking by the end of this year. Plus, there was 15% of export duty on brown fused alumina since last December, we predicted the export volume this year will shrink by 2/3 this year.
Asian Metal: Chinese brown fused alumina market is adversely affected by the economic crisis and export duty.
Mr. Wang: According to the statistics we have had, we are afraid that the whole export volume will go down by 2/3 due to the export duty and economic crisis. The price of brown fused alumina had been declining in the past first ten months of this year.
Asian Metal: So it is. 60% of the brown fused alumina used to be consumed in the overseas market, but this year, due to the shrinking of consumption in the export market, the supply of brown fused alumina seems in a serious oversupply situation in China.
Mr. Wang: So it is.
Asian Metal: what’s your opinion towards the demand and supply situation presently?
Mr. Wang: Before last September, brown fused alumina was quite prosperous. Both the smelters and the consumers have piled up quite considerable quantities of stocks. At that time, brown fused alumina smelters also built raw materials stocks at quite high price levels, and then came the economic crisis, many smelters still used the raw material purchased at high cost for production but sell the material at quite lower price level. Many of them incurred heavy losses. Compared with the same period of last year, brown fused alumina declined by at least RMB1,500/t in Henan Province, the operation rate in the market is at most 70%, this is suitable. The other problem is that the price is too low to solve many problems, such as the remuneration package for workers. This will cause a vicious circle. Some smelters may be forced to shut down.
Asian Metal: when do you expect the turning point will show up?
Mr Wang:I do not think positively towards the market prospect in the first two quarters of next year. If the brown fused alumina price cannot creep up by RMB200/t, many smelters shut up.
Asian Metal: What’s your opinion towards technology innovation and industry upgrading?
Mr. Wang: The technology upgrading is essential.
Asian Metal: How about your company’s operation condition?
Mr. Wang: Not very good. However, as we are the state-owned corporation, we have the responsibility so we are always making every effort.
Asian Metal: Do you have any suggestion to, policy makers in the country?
Mr. Wang: We suggested our government to cancel the export duty of brown fused alumina.
Asian Metal: What’s your advice to other smelters of brown fused alumina?
Mr Wang: Generally speaking, brown fused alumina market is quite chaotic this year. Some companies probably might have smuggled brown fused alumina at quite low price, which brings many impacts on the whole market. 99% of brown fused alumina smelters are private enterprises. They often stir up the price battles in the market, making it difficult for some big enterprises like ours to meet revenue target that could allow us to invest in new technology and necessary upgrading. Due to the shortage of fund, brown fused alumina market has been in the low level and repetitive level for a long-time. We sincerely hope smelters can stop the price battle in the market and increase more added value to our products. I believe that’s the main way to increase our competitive advantage in the international market!
Asian Metal: Thanks again for the interview!
Mr Wang: My pleasure!