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

Interview with Zengzhaoze, sales General Manager of Foshan Hongming Trade Co., Ltd

Established in year 2004, Foshan Hongming Trade Co., Ltd. is a professional company for trading nonferrous metals including zinc ingot, zinc hot-galvanizing alloy, zinc oxide and dregs remover products. The company is the general agent in South China of Zhuzhou Smelter Group, Henan Yuguang Zinc and Henan SGSCC Co., Ltd
Zengzhaoze: Zinc market will be stable in 2011 despite many pressures
----Interview with Zengzhaoze, sales General Manager of Foshan Hongming Trade Co., Ltd
Asian metal: Good days, Mr Zeng, what do you think about the zinc price tendency at the moment?
Mr. Zeng: As Chinese economy was stable, I think that the zinc price lingers in a reasonable range at the moment. Moreover, as zinc price followed copper price recently, stimulated by the strong future copper, zinc price may be pushed up in the future term.
Asian metal: There is some negative news in the zinc market, what is your prediction about the zinc market in the mid-long term?
Mr. Zeng: Zinc market is under many pressures indeed. Many countries have the weak economy and some potential risks. Therefore, I hold a cautious optimistic attitude towards the futures movement of zinc market in 2011 though many participants think that the zinc price may increase greatly next year. Firstly, although zinc price followed the strong copper price recently, copper price is near the high record and the increase extent was limited. Therefore, I think that the increase of zinc price was also limited. In addition, as the two market have different situations about the fundamentals, zinc price may not rocket even though copper price breakthroughs RMB100,000/t in the future. As many smelters expand zinc output capacity in these years, the supply is sufficient in the zinc market. Moreover, as the intensity of China interest rate increase is relatively mild, the price-control result may need long time to show. I predict that the zinc price tendency may form a V- shape and the reasonable may be RMB16,800-22,800/t.
Asian metal: As buyers are inactive in purchasing, zinc price becomes nominal, what do you think about?
Mr. Zeng: Yes, the trading in zinc market is dull at the moment. I think the reasons are like follows: Firstly, the demand for zinc products is low. Secondly, the sentiment in the market is weak. Thirdly, the medium-term market environmental is dull. As the volatile zinc market is unprecedented in the last five years, participants are cautious about trading. I thing that the trading in zinc market in 2011 may be still slow as 2010.
Asian metal: The movement of zinc market deviated from the fundamental before, but the weak fundamental impact the market again. What do you think about?
Mr. Zeng: After China furnished RMB 4,000billion to build the capital construction, the market may lose the sensitivity for the stimulation in 2011. However, although the capital construction may not stimulate the relatively steady China economy, the weak US dollar and inflation may support the zinc price. Therefore, I think that the movement of zinc price may still deviate from the fundamental of the market early 2011, but the market may be impacted by the fundamental in the second quarter.
Asian metal: The US dollar also impacts the zinc market. Do you think the weak US and European economy may dampen the zinc market?
Mr. Zeng: The weak US dollar cannot resolve the dull US economy radically, so I think that US may not carry out the QE3 and QE4 in the future. US just want to boost the national sentiments by QE2 to play down the harmful effect of weak economy. As most occident pursues the “overdraft” economic model, they accumulated many potential financial risks. Meanwhile, as the “overdraft” economic model cannot be changed in a short term, the countries need long time to adjust their economy. To maintain their economy developing, overseas government may carry out the tight financial policy to stimulate economy and steady the social contradictions. Therefore, the government may reduce the volume of. And as zinc price is mainly pushed up by these capital construction plans, I predict that the overseas consumption may reduce by 10-20% in 2011 compared with that in 2010.
Asian Metal: Moreover, participants fear that the China deflation policy may drag the zinc price. However, the market could digest the news like China interest rate increase. How serious do you think that the interest rate increase may impact on the market?
Mr. Zeng: I think that the China deflation policy is still relatively mild. The intensity of interest rate increase did not dampen the zinc market badly. I think that the China deflation policy need long time to show the control achievement. I predict that the zinc price may be impacted after two more times of interest rate increase.
Asian Metal: In the international market, the Euro debt crises and the conflict between Korea and South Korea may dampen the zinc market. Compare these risks with Chinese woes, which problems is worse?
Mr. Zeng: After the Euro debt crises, any international news could impact the zinc price. And the influence is short-lived and violent. However, as the financing and sentiment in Chinese market is steady, the domestic woes impact zinc market slowly and softly.
Asian Metal: At the end of year, producers are active in preparing the production plan in 2011. What do you think about the zinc market in 2011?
Mr. Zeng: I predict that the zinc price may still be nominal in the first quarter in 2011 and may decrease slightly in second quarter. Then, the price may recover in thirdly quarter and the trading in zinc market may warm up in the fourth quarter. It is a rare opportunity for traders as the range which the zinc price lingered in is narrower than that before the economic crises. We could tackle the risks easier in 2011.
Asian Metal: What about the business of your company?
Mr. Zeng: Hongming trading Co., Ltd is the general agent of Hunan Zhuzhou Smelter Group and Henan Yuguang Zinc. We mainly deal with zinc ingot, zinc hot-galvanizing alloy and kinds of rare metals. In 2011, our plan to increase the south china market share of zinc hot-galvanizing alloy from 68% to 75%. Meanwhile, we will develop the market of environmentally friendly dregs remover. We will increase the total sales volume and profit margin by 30% in 2011.
Asian Metal: Is there any advice to share with participant in the industry?
Mr. Zeng: The production capacity is surplus in zinc market. However, I think the zinc price may still have momentum to increase greatly in the next five years. After the economic crises in 2008, participants need time to adjust to suit the new market structure. I think the market may be stable in 2011 and. I hope that every participant could communicate with each other and hold the market dynamic.
Asian Metal: Thanks for Mr. Zeng to share your views with us. Have a nice day.
Mr. Zeng: Thank you.