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

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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 Zhang Xifeng, general manager of Ningxia Commercial Group Co., Ltd.

Ningxia Commercial Foreign Trade Co., Ltd., attached to Ningxia Commercial Group Co., Ltd. CNSIC, with registered capital 51 million Yuan, is specialized in import and export trade with annual export turnover over 60 million US dollars, which is the key leading imp-exp company of Ningxia. In the year of 2004, the company has passed ISO9001:2000 certification. In 2006, the Brand “Golden Stone” Ferro Silicon has registered in Japan. The annual export volume of Ferro Silicon accounts for 20% of Ningxia’s and 5% of national annual export volume. The Ferro Silicon are mainly exported to Japan and Korea and enjoys big share in Japan market. Operation policy: take advantage of local rich resource and local economic development ......
Ferrosilicon industry may warm up in the second half of 2009
----Interview with Zhang Xifeng, general manager of Ningxia Commercial Group Co., Ltd.
Asian Metal: Good Morning, Mr. Zhang. Thank you very much for your doing this interview. What’s your opinion about the economic trend in the coming months?
Mr. Zhang: The Chinese macroeconomic situation has become better since April compared with the economic index in the first quarter. Moreover, domestic demand has greatly increased. The Chinese central government invested 4,000 billion for some projects, and it really stimulated domestic demand. For instance, the sale volume of automobile increases obviously, and total retailing of social consuming goods has improved a little bit.
Asian Metal: That means with the automobile and construction industries recovering, the economic situation will become better in the third and fourth quarter, compared with that of the first and second quarter.
Mr. Zhang: Of course, it is still worse than that of the first half of 2008. But compared with that of the second half of 2008 and the first and second quarter of 2009, the Chinese economic situation will improve a lot in the third and fourth quarter of 2009. This is including the improvement in investment and the operating rates of projects. In any event, the economy still moves unsteadily now, for example, the decrease of export and the over-capacity of production.
Asian Metal: As for ferrosilicon companies, how is the demand and supply now? Are there many materials in their stocks? I think having gone through the great decrease of price, ferrosilicon companies are very cautious to resume their production, and there are few materials in their stocks now.
Mr. Zhang: I agree with you. There are few inventories now. Even if there are some stocks, it belongs to some foreign consumers. Chinese suppliers have few materials now. Chinese crude steel output has increased these months, so it will affect the production of some ferrosilicon smelters. As for export, the total volume of Chinese import and export has decreased by 22.8% in April, and it was 19.17% in March. The decrease amplitude is still expanding. Meanwhile, container throughput of Tianjin port decreased by 12% in April and by 10% in March. The statistics shows that the export market is really at the bottom. Actually the export volume of some categories has rebounded a little bit though the price has not increased yet. For instance, Chinese ferrosilicon export to Japan has increased in April, but the price remains at a low level.
Asian Metal: As for the demand from foreign customers, there are more South Korean consumers in the market since April, and also some Japanese trader have the intention of purchasing some materials currently.
Mr. Zhang: The statistics shows that Japan imported about 7,700t of ferrosilicon from China, increased by 2,100t on the basis of 5,600t in March. It is estimated that the volume will be 9,000-10,000t in May. Although the export volume increased a little bit, the price has not changed much, still in the range of USD1,050-1,080/t. The demand of ferrosilicon from South Korea was quite stable in the third and fourth quarter of last year, and they just started the purchase a little earlier this year.
Asian Metal: The Chinese economy is recovering now, so what about the situation in other countries?
Mr. Zhang: The economic situation is also improving in other countries. For example: the Consumer Confidence Index in Germany remains at a high level, and the salary income in the United States has not decreased in April though it did from January to March. It is really a positive sign. However, Japanese consumers are a little bit pessimistic, and the Consumer Confidence Index has reached the record low. In April, Japanese crude steel output has decreased by 43.6% in April, compared with that of 2008, and the utilization rate of capacity is only 60%. However, the output of stainless steel has decreased by 9.5% compared with that of March, which indicates that foreign consumers have few materials in stock now, and the demand of ferrosilicon may become better. Therefore, I think the market will improve in the third quarter, but not greatly.
Asian Metal: It is the time to have some uncompetitive enterprises to fall into disuse, but it will affect the employment greatly. Actually the central government keeps trying to restrict the development of ferrosilicon industry, and they cancelled the preferential power price and increased the export duty. Do you have any suggestions about the government's policy?
Mr. Zhang: In terms of the adjustment of industrial structure, the government policy is quite right, and the industrial structure needs an adjustment, otherwise it will become very chaotic. Moreover, some industrial policies of Development of Reform Commission for the time being are also very right, but it is a special time now, and contradictions among excess production capacity, local economic growth and employment are more prominent. Anyway, the central government should adjust the Industry, but in the period adjustment, the local government together with central government should take proper policies and measures, and smelters need some times to be seasoned with the industrial adjustment and upgrade. Ferrosilicon companies are really in a difficult position, and it is closely related to the steel industry. Production capacity of Chinese steel is surplus, and steel outputs in other countries are also decreasing now. For instance, Japan plans to produce 0.8 billion tons steel, but as far as the current situation is concerned, the output can not reach that level, and it will affect ferrosilicon demand from foreign consumers.
Asian Metal: How do you think ferrosilicon companies should react to the adjustment of the industrial structure?
Mr. Zhang: Ferrosilicon enterprises should improve their capacity. First of all, we should reduce our energy consumption. Secondly, we should adopt new technology and develop new products. Thirdly, we should improve industrial concentration.
Asian Metal: You revealed during "Ferroalloys Summit 2009" in Sanya that your company plans to start some new projects in the second half of this year? How is the project going now? Do you have any specific plans in the near future?
Mr. Zhang: We will focus on developing cyclical economy in the next few years, including ferrosilicon, and the first phase is to start in the second half of this year.
Asian Metal: So your company will not only be a trading company, but also a producer of ferrosilicon from the beginning of next year.
Mr. Zhang: Actually, we have begun switching to the production since 2008, including ferroalloys and agricultural products.
Asian Metal: Your company has many foreign customers. Will you intend to develop Chinese domestic market when you start the production as the demand from domestic consumers is also very big?
Mr. Zhang: We will mainly focus on exporting firstly, and later we will certainly sell ferrosilicon in bother domestic and foreign markets.
Asian Metal: What do you think about the ferrosilicon market trend in the second half of 2009?
Mr. Zhang: The ferrosilicon market will recover slightly in the second half of this year, and the price will go back to USD1,100/t. However, if there are some adjustments for power price and export duty, it is really difficult to say.
Asian Metal: In the near future, will your company set foot in other ferroalloys industries, such as manganese alloys or chrome alloys?
Mr. Zhang: Under in the current situation, it is quite difficult to start the business of other ferroalloys due to the extremely slow demand. It is too risky for us. We will do the business of ferrosilicon steadily and step by step, and when the market becomes better in the future, maybe we will start the business of other ferroalloys.
Asian Metal: Your company has been doing ferrosilicon business for many years, and I whish your company a bright future in the industry. Thank you again for your acceptance of this interview, Mr. Zhang.
Mr. Zhang: Thank you for your wish
Asian Metal: Goodbye!
Mr. Zhang: Bye-bye!