Manganese flake price to keep firm in 2019

Asian Metal: Thank you for accepting our interview. Please give us a brief introduction of your company and current state of operation.

Mr. Fu: Chongqing Runji Far East Alloy Co., Ltd. mainly engages in the business of alloy element additive, alloy element grain refiner and silicon power material. Our output of sintered manganese briquette has been increasing since 2016 as the product is quite safe with its high hardness. From 2012 to now, no burning case happened. According to experimental data from a major Chinese steel mill, the recovery rate of our manganese is over 95% while the manganese briquette recovery rate and manganese flake recovery rate of others are 90% and 84% respectively. As the recovery rate of our product is 5% higher than those from other companies, customers can save more than USD100/t by using our product compared with others.

Asian Metal: In terms of manganese briquette, what are your advantages compared to peers?

Mr. Fu: Chongqing Runji Far East Alloy Co., Ltd. is the only producer that produces manganese briquette through sintering and our product is of excellent hardness and safety as well as higher recovery rate of manganese compared with others. Evaluated by academician panel of China Nonferrous Metals Industry Association, our high-concentrate alloy element additive key technology has reached world advanced level.

Asian Metal: In your opinion, what are the important factors that would influence the price trend of manganese flake in 2019?

Mr. Fu: As ore supply is tight in Chinese market at present and it's impossible for ore prices to go down in international market in short term, there's no room for manganese flake production cost to decline. As a result, manganese flake prices have been standing relatively stable so far in 2019.

Asian Metal: Currently, Chinese manganese flake producers run at a relatively high operating rate, but they keep offers firm in spot market. What are the reasons from your point of view, and what will be the future trend?

Mr. Fu: Although the operating rate of Chinese manganese flake producers stands high, offers remain firm in spot market, indicating that supply is not too much higher than demand. In addition, production cost is close to the current market price. Thus, future price trend will depend on changes in supply and demand relationship, fluctuation of production cost and environmental and safety policies.

Asian Metal: In mid-April, National Development and Reform Commission sought public opinions for eliminating low-productive and outdated manganese flake production lines in China. In terms of manganese flake producers with an annual production capacity of less than 30,000t in Manganese Triangle, what do you think about the future development? Will this action exert impacts on manganese flake price trend?

Mr. Fu: Most manganese flake producers are located in poverty-stricken counties at present and they provide lots of job opportunities to local labors and contribute taxes to local government. In Songtao, Xiushan, Huayuan and other areas, manganese flake and manganese ore production is one of local pillar industries. Therefore, the central government is unlikely to adopt the "one size fits all" policy and the action won't make significant impacts on manganese flake price trend in the short term. However, it's necessary for all manganese flake producers to carry out technological reform, equipment upgrading and optimization of environmental protection equipment although the specific timetable is pending.

Asian Metal: What are the production and sales advantages of producers in Ningxia, Guangxi and Manganese Triangle, the major producing areas of manganese flake in China? Will there be competition in manganese flake market in future?

Mr. Fu: Manganese flake products from different areas are similar in quality now as the production technology gets matured gradually in China. Major producers in North China are superior in production scale, cost control and raw material supply while producers in South China are slightly superior in production process and logistics cost. Based on similar quality, prices will be the main factor affecting sales. In the near future, I don't think there will be price war in manganese flake market and producers will develop together.

Asian Metal: Could you share with us your domestic trade and export status as well as future strategic plan?

Mr. Fu: As we adopt a special production process to produce manganese briquette, customers can enjoy excellent safety and high recovery rate of manganese by using our product. Thus, our sales of manganese briquette go up steadily in both domestic market and overseas market. We will further boost production capacity of sintered manganese briquette to meet market demand.