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    Business Visits

    Asian Metal visits Do-fluoride, Weilai Aluminum, Chalco Zhongzhou, Zhongse Dongfang Industrial and Shengxiang Industrial

    On the morning of February 23, Mr. Friday Gao, senior analyst of Asian Metal visited Do-fluoride Chemicals, an aluminum fluoride producer with capacity of 120,000tpy, and met with Mr. Gu Zhengyan, vice general manager, Mr. Zhao Weifeng, deputy marketing director and Mr. Hou Zhongjian, marketing manager, etc.
    Mr. Gu pointed out that new concluded aluminum fluoride prices are above RMB8,000/t ex works and part deals were even concluded at RMB8,300/t DDP. He believed that the price will continue to go up, supported by several reasons.
    1)Environmental protection policy is strict and aluminum fluoride producers cut production by around 50% in Henan. Even if the price goes up further, those producers who closed production years ago, may not restart again due to the strict policy. “We now can only produce 4,000t of the material per month,” said Mr. Gu.
    2)Aluminum fluoride stocks supply is tight. Most aluminum fluoride producers do not keep stocks due to the low operating rate. Meanwhile, a few producers in Shandong, Hebei and Henan focus on hydro fluoric acid instead of aluminum fluoride. In addition, aluminum fluoride producers in Anhui and Jiangxi remain out of production. “The output in February will be less than 50,000t,” stated Mr. Gu.
    3)Demand is recovering. Chinese aluminum smelters will have to add aluminum fluoride stocks soon in late February and early March. “Payment was once made within 2-3 months, but we can receive 100% prepayment for around 20% deals,” said Mr. Gu.
    Regarding the export market, He believed that export prices will follow the domestic prices, and Chinese producers prefer to make deals in the domestic market. He is optimistic about the demand in 2017. “China produced around 710,000t of aluminum fluoride in 2016, and the aluminum output was around 33.5 million tonnes,” said Mr. Gu.
    Asian Metal
    From left: Hou Zhongjian, Gu Zhengyan and Friday Gao
    In the afternoon, Mr. Friday Gao visited Jiaozuo Zhonghe Weilai Aluminum, with aluminum fluoride capacity of 70,000tpy. Mr. Gao talked about the aluminum fluoride market with Mr. Feng Yongjun, executive vice president, Mr. Jiang Baofeng, deputy marketing general manager and Mr. Yuan Shuai, marketing manager.
    Mr. Feng and Mr. Jiang are all confident about the aluminum fluoride market because of tight supply, high cost and strong demand. According to Mr. Jiang, they have concluded deals at around RMB8,050/t DDP recently and do not hold stocks on hand. He predicted that the price will reach RMB8,400/t DDP in March at least. Because of strict environmental protection policy, they closed one production line and only can produce around 3,000t of the material per month now. “Aluminum fluoride supply will be in shortage and it will become difficult for consumers to buy the material next month,” said Mr. Jiang.
    Asian Metal
    From left: Friday Gao, Feng Yongjun and Jiang Baofeng
    In the same afternoon, Mr. Gao also visited Chalco Zhongzhou, an alumina refinery with capacity of 3 million tonnes. Mr. Xia Zhonglei, purchase director of the company said that the refinery is running at 2 million tonnes and may cut production because of environmental protection policy. They need to consume around 400,000t of Chinese origin bauxite and 20,000-30,000t of imported bauxite.
    They can consume around 100,000t of imported bauxite per month but did not keep the demand in 2016. In 2017, they plan to increase the demand for imported bauxite because of strong alumina market.
    On the morning of February 24, Mr. Friday Gao from Asian Metal visited Henan Zhongse Dongfang Industrial Co., Ltd., with aluminum fluoride capacity of 60,000tpy. Mr. Zhang Hongwei and Mr. Cao Yongping, deputy marketing general managers of the company expressed their opinions on the aluminum fluoride market.
    Mr. Zhang pointed out that aluminum fluoride supply is very tight because of environmental protection, and the fluorspar prices are high-held. The concluded price in Henan is around RMB8,000/t DDP, and the price in Xinjiang has touched around RMB8,100/t DDP.
    The plant is running at 30,000tpy and plans to resume the second line with capacity of 30,000tpy in March.
    Asian Metal
    From left: Mr. Zhang Hongwei, Mr. Cao Yongping and Mr. Friday Gao
    In the afternoon, Mr. Friday Gao visited Henan Shengxiang Industrial Co., Ltd., a bauxite trader. Mr. Zhou Wei, general manager of the company noted that they focused on Malaysian bauxite in 2016, but the supply is very tight, so they did not make new deals recently. He pointed out that the price for Malaysian bauxite Al 46% Si 12% is around USD35/t FOB Malaysia now.
    The trader has strong interest in Indonesian bauxite Al 46%min Si 10%max, as they mainly sell bauxite to Henan, where consumers prefer to the material. If Indonesia resumes bauxite export, they will return to Indonesian market.
    Asian Metal
    Mr. Zhou Wei and Mr. Friday Gao
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