12th Rare Earth Summit

May 18-19, 2020
Hangzhou, Zhejiang, China

11th Aluminum Raw Materials Summit

May 14-15, 2020
Hangzhou, Zhejiang, China

9th Magnesium Summit

April 16-17, 2020
Hangzhou, Zhejiang, China

13th World InBiGeGa Forum

Mar 12-13, 2020
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

Interview with Li Fengguang, General Manager of Ningxia Orient Nanko Co., Ltd

Ningxia Orient Nanko Co.,Ltd is a subsidiary owned by Ningxia Orient Tantalum Co., Ltd, focusing on producing green silicon carbide powder. The company began the research and production of silicon carbide powder from 1998. Ningxia Orient Tantalum Industry Co.Ltd is a base of high-tech enterprises and national high-tech research development plan and results approved by Ministry of Technology and Science of China. It is the first national post-doctoral workstations in Ningxia. Parks of new materials and Ningxia key laboratory of special materials are located here. Now it is the largest tantalum and niobium production base and research and development center.
Green silicon carbide powder market to be promising supported by photo voltaic market
----Interview with Li Fengguang, General Manager of Ningxia Orient Nanko Co., Ltd
Asian Metal: Hello, Mr Li. First I should thank you for accepting Asian Metal’s interview. Please share your opinion on the current macroeconomic situation and the trend in the near future.
Mr.Li: To be frank, I personally believe that the macro-economy is still very slow. Though the Chinese government has issued many policies to drive up domestic demand, China depends on the export market heavily. More than half of GDP growth is supported by exports. The domestic market is getting better, but we have not seen significant improvements to the export oriented enterprises. The demand from American and European market keeps sluggish. The green silicon carbide market has not been driven up by the domestic demand greatly, but the prices of raw materials were pushed up recently. Petroleum coke increased from RMB500-600/t ex works to RMB1,300-1,500/t ex works, which will cause the green silicon carbide prices to increase by more than RMB1,000/t.
Asian Metal:What’s the relation between export and domestic sales?
Mr. Li:We plan to export 4,000t every year, but the export volume this year is small. In the past years, we exported 1,000t of black silicon carbide every year when we are the subsidiary company of Orient Tantalum Industry Co. Ltd, but we received very few orders from overseas consumers and agents.
Asian Metal :I just received the information from the Asian Photo Voltaic Summit that some major PV manufacturers, such as Wuxi Suntech Company and LDK Solar Co., Ltd are recovering production gradually. Some of them are producing at full capacity. Recently, they received more orders from domestic end-users. What do you think about it?
Mr.Li:We are supplying solar cell wafer cutting materials to the major consumers in China, such as LDK and Trina Solar. Maybe there is a signal to show the market is recovering, but the total consumption is still less than half of that last year.
Asian Metal:The producers in Zhengzhou increased their output of green silicon carbide powder, especially for the solar cell wafers production. As they have produced the materials for many years, the downstream consumers usually get the materials from them regularly. When the operating rates increase in downstream producers, they will receive more orders quickly.
Mr.Li:I find that the consumption of green silicon carbide powder is less than half of that last year for domestic sales. Before last October, the quality of powder is much inferior to the current materials, but the demand was so strong that the supply kept in tight availability even though all the producers were producing at full capacities. However, nearly all the major suppliers are running part of capacity.
Asian Metal:How about the development of domestic photovoltaic industry?
Mr. Li: Two days ago, a photovoltaic industry forum was held in Shuizuishan, Ningxia autonomous region, and all the giant manufacturers participated in it. During the forum, we can see that Ningxia is forging a base of PV. A project being built by Jiangsu Sunshine Company, whose capacity of polysilicon is 1,000tpy. State Group of China has made an investment with a capacity of 5,000tpy for polysilicon, and the construction has been started from March. Zhejiang CHNT will establish a PV power station in Ningxia. From the great investments we see that Ningxia and Shizuishan governments are ready to forge a PV industry belt, which is just the beginning and it has a long way to go.
Asian Metal:That is to say, all the projects have been approved by the governments and will be put into production in the near future?
Mr.Li:Two of the projects have been started, and the third one is in trial production.
Asian Metal:Have all the projects been approved after Chinese governments’ RMB4,000 billion investment plan or before it?
Mr.Li:Before the RMB4,000 billion investment, the PV plan was on the way to be approved, and it is more easily to get approved after the great investment..
Asian Metal :That’s to say, the great investment accelerated the progress, and supports the development of the Chinese PV industry.
Asian Metal : What about the technical innovation and upgrade of products? As you just mentioned, the quality of green silicon carbide powder is much better than it was last year, but the sales keep slow.
Mr. Li:Yes, the prices have dropped down greatly. The powder technology was first introduced from Japan, and the widely acknowledged company was Shinano, Fujimi and Nanko. However, I think the green silicon carbide powder produced by Chinese enterprises is not worse than the Japanese powder in terms of quality.
Asian Metal : As far as I know, the quality of green silicon carbide powder produced in Orient Nanko is the top-ranking material in China.
Mr.Li:Certainly. It is not difficult to master the technology of green silicon carbide powder, but it takes large cost to produce better quality powder. Therefore, the low quality materials could be sold out easily last year, when the demand was strong, because many enterprises did not focus on the quality of powder. This year, the requirement on granularities is narrower, which means the output rate will be lower; the other one is the requirement on shape. To meet the new requirements, we need to change the processing methods. The main processing equipments are micro ball-mill,ramond grinding machine and air-flowing machine. This year, the best selling materials are produced by ramond machines.
Asian Metal :Are there more requirements on the green silicon carbide lumps if the classification is by water?
Mr.Li: Yes, it will need a high density of lumps. No matter what kind of furnaces, it was easy to be accepted. However, if the furnace capacity is less than 12,500kw, it will not be sold out this year, which causes more smelters establish big capacity furnace. The newly built furnaces set up recently were more than 12,500kw in capacity. And some others trialed the furnaces with capacity of 15,000kva and 16,000kva, and they have succeed. We are now consuming green silicon carbide lumps produced by 16,000ka furnace in Gansu province.
Asian Metal: What about the operating rate?
Mr.Li: I think it is 70% at most. In May, many silicon carbide enterprises were out of production. Though Ningxia government issued a policy to reduce the power price by RMB0.08/kwh, many smelters still did not produce in view of the financial difficulty with circulating capital amid the weak demand from downstream consumers.
Asian Metal :Yes, many smelters are facing the problem of a lack of circulating capital.
Mr. Li:The silicon carbide industry is both labor intensive and capital intensive.
Asian Metal :It consumes power, discharge pollutants and needs large amounts of capital to maintain the production. The downstream smelters ask for cash payment terms even though the demand keeps slow this year.
Mr.Li:Currently, the high quality lumps are still in short supply, while the common materials are in large stockpiles. The big smelters ask for payments before delivery or at the end of one month. The main reason is that many participants in this industry are not in good credit standing. Due to the tight availability of circulating capital, suppliers request payment before delivery. I think it is attributed to the lack of credit.
Asian Metal :Has the financial difficulty been alleviated slightly compared with that in Q1?
Mr.Li: I don’t think so. For more smelters to resume production, they will need more cash to maintain the production. Now many downstream consumers make payment after three months, which affects upstream suppliers who are in financial difficulty.
Asian Metal :We know that the demand is increasing, but many producers are still out of production due to financial difficulties.
Mr.Li: Yes, it is quite difficult. What you said is the fact. Since powder production is easy to get profits with low investments, more and more participants begin to produce when the demand was strong. However, it also causes large differences in quality and prices due to oversupply.
Asian Metal:From the beginning of this year, many medium and small-sized producers built the water-classified production line and they supply the materials to end-users to make more profits, but the result is the differences in quality.
Mr. Li:Yes. In China, there are only several major large-scale powder producers, but too many small-sized producers and even many individual ones in the spot market. I think is the main reason for quality differences, which cause the market in chaos. We always face the problem when negotiating the prices.
Asian Metal: With high-quality materials, we can get a better price, but some other suppliers press down the prices by the excuse of lower prices in the spot market.
Mr. Li: In this industry, many end-users, the polysilicon wafers producers, have little knowledge on the function of silicon carbide and the cutting technology. Once they come across some problems, many of them do not solve it by technology but blame their suppliers.
Asian Metal: Please introduce Orient Nanko to us.
Mr.Li: Orient Nanko is a subsidary of Orient Tantalum Industry Co.Ltd who cooperates with Nanko, with 90% of shares in stocks. Our company was put into production from April 18th, and the output in June is 600-700t and at the end of July it will be 1,000tpm, which means that the first phase project will run at full capacity. The total annual capacity is 13,000-15,000tpy. The second phase project is under construction, with full capacity of 30,000tpy, which will be the largest powder enterprises.
Asian Metal:What you said the powder is only the materials to cut the solar cell wafers? Are the JIS600, JIS800, JIS1000 or JIS2000 excluded?
Mr.Li: Correct. The output of JIS1200 and JIS1500 which are used to produce polysilicon wafers will be 30,000tpy next year.
Asian Metal: Please make some suggestions to our government on behalf of a leading company in powder processing industry.
Mr.Li: Before our talk, I was on a meeting of the policy of silicon carbide export, talking about the export quotas. Silicon carbide exporters get export quotas through the form of tender, and all the qualified exporters are the ones who have exported silicon carbide in the past years. There are many enterprises that do not produce any silicon carbide getting large quantities of export quotas, while many big producers could not get qualifications to export. We are trying to get some export quotas, but it is difficult for us to make it.
Since the silicon carbide is an energy-consuming industry, we understand the policy on this industry. However, what we are considering is how to prompt the exports of high added value materials. Export quota policy should be a method to regular the resources by administrative means, but it is a way to make benefits for a few companies nowadays. It is a problem of interests. The tender price is only RMB300-400/t, but it was talked up to as high as RMB3,000/t last year. Currently, the market price is RMB1,200-1,300/t. I think the macro-policy is correct, and we suggest the government to distribute more quotas on the high added value materials. I think it will benefit to this industry and the whole country.
Asian Metal: Many enterprises appeal to increase the export quotas on green silicon carbide, or take other measure to encourage the export of green silicon carbide powder.
Mr. Li: I think so. We suggest government to administrate silicon carbide export market according to different grades. For example, green silicon carbide powder, abrasive materials and refractory grade silicon carbide.
Asian Metal : Except the export quotas, the EU imposes a 52.6% anti-dumping tax on Chinese silicon carbide, which blocks Chinese green silicon carbide out of the European market. Now many PV producers are trying to import green silicon carbide powder from China directly.
Mr.Li: Therefore, many domestic enterprises are considering to build plants in Southeast Asia in order to enter the European market. Due to the high anti-dumping tax, Chinese green silicon carbide is not competitive in terms of price.
Asian Metal: Please make a short-term prediction to green silicon carbide powder and solar cell market.
Mr.Li: I am optimistic about the future market. Objectively, in the past two years, the Chinese PV market has developed rapidly, but the market was restricted by the short supply of polysilicon. Xinguang Engergy and China Silicon could supply several hundred tons of polysilicon, so most of raw materials were imported. Supported by strong demand, the profit rate reached 700%.
Driven by the significant interests, private, government and foreign investors have invested to produce polysilicon. Now most of the smelters are just in trial production or under construction. The properties of polysilicon production are long-term construction, large amount investments. However, if all the smelters put into production, it will drive up the green silicon carbide powder market significantly. We know that Chinese government supports solar cell industry in the long run. Furthermore, many foreign governments encourage PV industry to stimulate economy in the long run, for it is a renewable and clean energy.
We are confident in the market in the long run, and some good signals may appear in the fourth quarter of this year.
Asian Metal : So, Orient is establishing the second phase production line though the market is slow currently.
Mr.Li: Though we are being affected by it, we will insist on producing high quality green silicon carbide and forging a world-class powder production base as a leading state owned enterprise.
Asian Metal : Thank you very much. We certainly have a profound idea about this industry.
Mr.Li: We learn from each other. I have worked in this industry for several years, so I think we will cooperate for long term. Through Asian Metal we will develop more overseas market. Furthermore, we hope Asian Metal will play as a bridge for this industry.
Asian Metal : GM Li, thank you again for accepting the interview. Hope we will cooperate again in the future.
Mr.Li: Ok, good bye!