Executive Interviews

Asian Metal: Mr. Liang, thank you for accepting Asian Metal's interview. To begin with, could you please introduce your company?

Mr. Liang: Our company covers the entire production chain, from raw ore procurement to calcination and processing. We currently employ 40 staff members in production and sales, five technical specialists, and three laboratory analysts. By maintaining strict control over every stage of the production process, we ensure stable operations and consistent product quality. In addition, we are equipped with advanced refractory testing instruments and an independent laboratory capable of conducting comprehensive quality inspections. Every production batch undergoes rigorous testing to ensure all technical specifications meet customer requirements, providing high-quality raw materials for the manufacture of premium refractory products.

Asian Metal: Could you briefly describe the current demand situation for bauxite in the Chinese market?

Mr. Liang: According to statistics from the China Refractories Association, Shanxi produced approximately 3 million metric tons of bauxite in 2025, while Henan and Guizhou together produced around 1.5 million metric tons. China's total bauxite exports reached approximately 700,000 metric tons during the year, indicating that total domestic demand across all grades of bauxite was around 5.3 million metric tons in 2025. Before 2020, annual domestic demand consistently exceeded 6 million metric tons. In recent years, however, demand has gradually declined due to the continued downturn in downstream industries such as steel and cement.

Asian Metal: In recent years, both the quality and availability of domestic bauxite resources have been declining. How has your company responded to this challenge?

Mr. Liang: The shortage of high-quality raw bauxite has become the most significant challenge facing the industry. It has constrained both product quality and production capacity. Meanwhile, rising prices for premium ore have significantly increased production costs for calcined bauxite, putting pressure on profitability across the industry. To address these challenges, we have adopted several measures. First, we have established long-term strategic partnerships with mining companies and secured stable supplies of high-quality ore through long-term procurement contracts, ensuring both raw material quality and supply stability. Second, we continue to optimize our calcination process by blending ores of different grades to improve resource utilization and reduce reliance on premium-grade ore. At the same time, we further enhance product quality by optimizing firing temperatures and extending holding times to reduce impurity levels. In addition, we continue to strengthen our laboratory testing capabilities by improving our analytical systems, ensuring that all product specifications are accurately verified and fully comply with the technical requirements of both domestic and international customers.

Asian Metal: Prices for calcined bauxite above 85% alumina declined and then rebounded during the second quarter this year. What do you believe caused this movement?

Mr. Liang: The primary reason was the influx of a batch of lower-quality raw materials into the market around the Spring Festival, which temporarily disrupted market pricing. Normally, 85% calcined bauxite should contain less than 2.0% iron, while export-grade products generally require iron content below 1.8% and bulk density above 3.15 g/cm3. However, much of the material that entered the market after the holiday contained over 2.2% iron and bulk density of only around 3.0 g/cm3, making it unsuitable for mainstream domestic and export markets. As a result, these materials had to be sold at discounted prices. Since late May, tighter controls on raw ore production have driven up raw material costs, allowing calcined bauxite prices to recover to previous levels. Our company always recommends products according to customers' specific application requirements, offering different quality grades to achieve the optimal balance between product performance and procurement costs.

Asian Metal: What is your outlook for calcined bauxite prices in the third quarter of 2026?

Mr. Liang: Although domestic demand remains relatively weak, safety inspections launched since June have significantly restricted mining activities in major producing areas such as Qinyuan County in Shanxi Province. As Qinyuan accounts for more than half of Shanxi's raw bauxite supply, the current tight supply situation is unlikely to ease in the short term. While inventories of both raw ore and calcined products remain relatively adequate, we expect prices to continue rising moderately throughout the third quarter and reach a seasonal peak after demand recovers in September. Currently, rotary kiln calcined bauxite aggregate with 85% alumina is priced at approximately RMB 2,500 per metric ton. We expect prices to increase by another RMB 30–50 per metric ton during the third quarter.

Asian Metal: How is your company's business divided between domestic and overseas markets? Do you plan to further expand internationally?

Mr. Liang: At present, we mainly participate in export business through trading companies, providing OEM processing services for overseas markets. Approximately 40% of our sales are domestic, while the remaining 60% are exported to customers worldwide. Given the continued decline in domestic demand caused by capacity reduction policies in the steel and cement industries, expanding overseas markets has become an important strategic direction for our company. Regions such as Southeast Asia, India, Pakistan, Russia, and the Middle East are experiencing rapid industrial development and offer significant market potential. For example, China exported 103,000 metric tons of calcined bauxite to India in 2025, second only to exports to Japan at 117,000 metric tons. During the same period, Thailand and Türkiye imported 33,000 metric tons and 36,000 metric tons, respectively, while Vietnam and Malaysia each imported approximately 11,000 metric tons. These markets all present promising growth opportunities. Looking ahead, we hope to further enhance our product quality and strengthen our reputation so that more overseas customers will recognize and choose our products.

Asian Metal: Export demand has weakened since the second quarter of this year. How is your company responding?

Mr. Liang: Most overseas customers typically complete their annual procurement before the Chinese New Year. This year, many customers had already built sufficient inventories during the first quarter, resulting in noticeably slower purchasing activity since April. For example, India imported 6,011 metric tons and 13,000 metric tons of calcined bauxite from China in March and April 2025, respectively. In the same period this year, imports fell to just 3,111 metric tons and 8,224 metric tons, representing a year-on-year decline of more than 30%. We expect overseas demand to gradually recover beginning in September as inventories are consumed. In the meantime, we will continue maintaining stable production, strengthening customer relationships, and improving both product quality and service to prepare for the market recovery.

Asian Metal: Finally, what are your views on the long-term development of China's calcined bauxite industry?

Mr. Liang: The current imbalance between supply and demand is widely recognized throughout the industry. Under such market conditions, improving competitiveness is far more important than relying on favorable market cycles. Our strategy is to continuously optimize production equipment, advance digital management, further improve product consistency and quality, and reduce manufacturing costs so that we can maintain sustainable operations even under relatively low profit margins. Opportunities for expanding within the domestic market are becoming increasingly limited. In contrast, overseas markets—including Southeast Asia, the Middle East, Africa, and South America—offer greater growth potential, although competition is intense and profit margins remain under pressure. Going forward, we will focus on extending our downstream value chain and increasing product added value, thereby creating greater value for our customers and continuously strengthening our core competitiveness.