COVID-19 piles pressure on delivery of high-purity metal products

Asian Metal: Mr. Cai, thank you for your interview with Asian Metal. First of all, please briefly introduce your company's business operations and your own experience.

Mr Cai: Hello, thank you very much for giving us the opportunity to show our company's style and express my heartfelt thanks here! Thank you so much for Asian Metal continuous supporting for the growth of our company!

Wuhan Xinrong New Materials Co., Ltd. mainly deals with ultra-high purity scattered metal materials, such as indium, germanium, gallium, bismuth and antimony. At present, the products have simple metals, oxides and compounds.

I graduated from Wuhan University of Technology, majoring in economics. The first entrepreneurial life in my life since sophomore. Maybe during college, I joined my own community for the sake of myself and I started to plant the idea of starting my own business. Therefore, we have been on the road of entrepreneurship since the day we graduated from university and we have co-founded three companies. Today, we are still struggling to start a business. Today, we are backed by the National Key Laboratory of Wuhan University of Technology. The team members are from here. Everyone holds the belief of "forging ahead and making the country stronger" and will definitely make ultra-high-purity semiconductor materials bigger and stronger.

Asian Metal: What are your main products and what are the main applications?

Mr Cai: Our company's main product series are: tellurium, indium series, gallium series, germanium series, antimony series, bismuth series, etc. Different product series, different purity and application fields are completely different. The products we currently produce are mainly used in infrared detectors, laser guidance, fiber optic communications, 5G, petroleum catalysts, new energy vehicles, LCD displays and other fields. There are many categories and a wide range of uses.

Asian Metal: Looking back on the past three years, the current prices of metal germanium are in a record low. What is the reason? When do you think the prices will be rebound.

Mr Cai: Let me talk about my feelings regarding the issue of the prices of germanium metal. Because I have been in the industry for a short time, I have not experienced much experience in the rise and fall of metal germanium, but only experienced the two declines and rises of metal germanium during 2015-2016 and 2018-2019. The two reasons for the declining and increasing in the prices of germanium metal are fundamentally different. If the prices comparison alone is not comparable, you have to combine the historical environment and conditions at that time and it makes sense to put the prices of this metal germanium at that time.

If you simply look at the prices of germanium metal from 2018 to 2020, I think there are several reasons:

First, the global economic downturn and the Sino-U.S. Trade war have affected the export of germanium metal to a certain extent. For domestic sales, domestic germanium metal producers have increased their inventory, destocked and cut prices to sell. This is a fast way to increase revenue, which has driven down the prices of germanium metal.

Second, the domestic economy is affected by the global economy and the industrial structure is also being adjusted. For current germanium metal companies, competition will increase and prices competition between each other will become fierce. The continued prices war will definitely cause the prices of germanium metal to fall.

Third, affected by Fanya's auction, the market was pessimistic about the large inventory of germanium meta. If a large amount of germanium metal would enter the market, which would impact on the original equilibrium supply and demand relationship. This is a very large factor in price declining.

The pneumonia incident that occurred throughout the country earlier this year caused a lot of economic difficulties for many companies and it will also have an impact on the scattered metal industry. Therefore, the supply relationship of germanium metal in the market has greatly affected and in the short term it will still be greatly affected and the prices will remain the same. However, from the comprehensive factors of enterprise production, environmental protection requirements and exports, the prices of germanium metal would rebound from the second half of 2020.

Asian Metal: The supply and demand fundamentals of gallium metal are trending healthily. What are the outstanding advantages of your gallium metal business?

Mr Cai: At present, the main outstanding advantages of our company's gallium metal business are stable quality, stable production, short delivery cycle and reasonable price, which can well meet customer production needs.

Asian Metal: Fanya's gallium metal, germanium metal, indium ingot and other inventories were successfully auctioned in the second half of 2019. How will it affect the market in 2020?

Mr Cai: Fanya's gallium metal, germanium metal, indium ingot and other inventories were successfully auctioned in the second half of 2019. I think it will have a certain impact on the market, but whether this effect is short-term or long-term, it would take time to test. Combining the three products' inventory and market capacity, the impact of each product would also be different. For some products, it is a historical opportunity and for some products, it may be a long-term downturn. For products with large product inventory and small market capacity, the impact on prices may go down; on the contrary, for products with small product inventory and large market capacity, the impact on prices may go higher.

Asian Metal: After the large-scale epidemic in Wuhan province, as a local entity in Wuhan province, would you like to talk about the current resumption of work and its impact on the future?

Mr Cai: After the large-scale epidemic in Wuhan province, in the short term, it would still cause great difficulties for our production. Many of our employees are still unable to return to Wuhan and production materials are temporarily unable to come in. Therefore, in accordance with relevant government regulations and measures, pay attention to protection and safety and gradually do preparations before returning to work.

After the resumption, we have to hurry to produce, because many of our customers are in short supply of the materials we produce. Because the epidemic situation delays production and delivery, everyone can understand, thank you here for understanding and supporting our customers and friends. After the resumption of work, we have to hurry to production, the first quarter still has a great impact on us. Although it is difficult, we must continue to work hard and still have confidence. In the next three quarters, we will strive to achieve the goals set at the beginning of the year.

Asian Metal: Does Wuhan Xinrong have any business plans in the next three years?

Mr Cai: Wuhan Xinrong New Materials Co., Ltd. will gradually expand the categories and types of our high-purity metal materials, starting with ultra-high-purity scattered indium, germanium, gallium, antimony and bismuth in the next three years and work towards higher MBE levels. Gradually establish the entire industrial chain layout of 1-5 key metal product varieties, from raw materials to high purity and finally to comprehensive recycling and recycling, to provide better services for enterprises. Going abroad, looking at the world, let our materials go to the world.

Finally, I hope to go hand in hand with our predecessors, colleagues and friends of scattered metals to promote the return of the value of scattered metals, improving the level of the entire industry and jointly revitalize the national industry. We believe that the spring of minor metals will soon come.

Asian Metal: Thanks to Mr. Cai for your exclusive interview and for your consistent support and trust in Asian.

Mr Cai: Thank you very much for Asian Metal's concern and help to Wuhan Xinrong New Materials Co., Ltd. and sincere thanks for providing more professional information on our growth. We also believe that Asian Metal will do better and better. Hope we go hand in hand. One last word: Thank you!