Executive Interviews

Asian Metal: Thanks for joining our interview, Mr. Zhu, please introduce your company briefly.

Mr. Zhu: Sichuan Yinhe Chemical Co., Ltd., located in Mianyang Science and Technology Park and is known as the key undertaker of “10,000t Production Project of Sodium Alum and Chromium-based new materials by Carbonization”, which is a project of the National 863 Program . Our business covers business covers R & D and production of chromium chemical, chemical engineering of vitamin series and sulfuric acid series, as well as international trading. The annual output value is over 4 billion yuan. The company's annual production capacity, if converted into sodium alum, is about 120,000t and the chrome metal’s annual production capacity is around 10,000t.

Asian Metal: The export volume of chrome metal and chromium salts in 2021 was relatively stable YoY, but it increased greatly from March 2022 to May in 2022, what do you think are the reasons?

Mr. Zhu: Yes, we can see from the export data that the export volume of chrome metal increased from around 300t each month in 2021 to around 1,250t in March, 2,278t in April and 1,849t in May 2022; and the export volume of chrome oxide green increased from around 690tpm in 2021 to 730t in March, 1,003t in April and 1,264t in May 2022; the export volume of chromic anhydride increased from 108t in January, 19t in February to 245t in March, 180t in April and 504t in May 2022. I think there are two main reasons, firstly, the conflicts between Russia and Ukraine increased the difficulties of exporting materials to customers from Russia, which was used to be the main export country of chrome metal and chromium salts, so other countries had to purchase from China Secondly, l think the overseas demand started to increase with the recovering operation rates brought by relieved control of COVID-19 in foreign countries like Southeast Asia. From the export data of chrome metal during June to September, we can see that the demand is quite stable, and the volume stands at 800-1,000t a month; and the chrome oxide green’s export volume stands at 1,300tpm during June to August, and decreased to around 529t in September; and the export volume of chromic anhydride kept decreasing from June to September, stands at 707t in June and 179t in September.

Asian Metal: what are the impacts on prices in domestica market after the export volume increased sharply from March to May 2022?

Mr. Zhu: Because the export volume increased and the overseas demand increased hugely, the chrome metal and chromium salts prices increased in dometic market during the period. The prices of chrome metal 99%min increased from RMB65,000/t (USD9,716/t) EXW D/P in mid March to RMB80,000/t (USD11,948/t) in May; and the prices of chrome oxide green increased from RMB29,000/t (USD4,335/t) EXW D/P in March to RMB32,000/t (USD4,783/t) in May. The prices of raw materials including chrome ore also contributes to the price increase. The import prices of chrome ore increased from USD200/t CIF China in February to USD320/t in May, and then prices kept firm in May. Therefore, for we producers, we lifted the chrome metal and chrome salts’ prices mostly to cover the cost. The prices of chrome metal stay weak during June to September, from RMB75,000/t (USD10,562/t) EXW D/P in June to RMB68,000/t (USD9,576/t) EXW D/P in September; and the chrome oxide green’s prices decreased from RMB30,000/t (USD4,225/t) in June to RMB27,000/t (USD3,802/t) in September; the prices of chrome ore decreased from USD300/t in June to USD220/t in September.

Asian Metal: What do you think of the domestic and overseas demand of chrome metal and chromium salts from March to May 2022, do you think the demand can support the high prices of chrome metal and chromium salts?

Mr. Zhu: Firstly, from the perspective of demand, l think the operation rate in Jiangsu, Zhejiang and Shanghai decreased sharply from March to May because of COVID-19，so the market showed weak demand during that period. But after June, the situation got much better, so the operation rate of customers increased and also the demand increased, and we belived that the overall demand was stable in the third quarter. Secondly, from the raw material side, the prices of chrome ore stood at the high level from March to May, and also the inventory of chrome ore in whole China kept at a low level, therefore, the prices of chrome ore kept steady in the third quarter. Therefore, the prices of chrome metal kept steady at RMB68,000-72,000/t (USD9,450-10,006/t) EXW D/P and also the chrome oxide green stood at RMB27,000-30,000/t (USD3,752-4,169/t) EXW D/P in Q3.

Asian Metal: How do you see the export price trends of chrome metal and chromium salts and volumes in quarter four?

Mr. Zhu: According to the export situation in September and October, the export volume decreased compared with March to May. The European market shows weak demand at present, and some of the steel mills and foundries stopped their production due to the high costs of energy. Therefore, the demand for chrome metal and chrome salts decreased in European market. In addition, from the perspect of domestic market, we think the market demand is gradually getting better since September, and the domestic prices of chrome metal and chrome salts increased due to the increased prices of chrome ore and soda ash. Therefore, we predict the domestic and export prices of chrome metal and chrome salts will increase in the fourth, the domestic demand will keep steady but the export demand will decrease.

Asian Metal: Please introduce your company's development plan in 2022.

Mr. Zhu: Firstly, we will focus on our main business and focus on chrome salts and chrome metal in domestic market; Secondly, we will continue doing the export business, and will increase the volume of exporting chrome metal and chrome salts, and expand the market share of exporting.

Asian Metal: Thanks for your sharing! Wish your company further success!

Mr. Zhu: Thanks!