Chinese selenium dioxide market promising in 2021

Asian Metal: Hi Ms. Wu, thanks for accepting our interview. Could you please introduce your company briefly?

Ms. Wu: Guizhou Hengzhao Trading Co., Ltd. is mainly engaged in the processing of crude selenium and sales of selenium dioxide and selenium powder. The monthly supply of selenium powder and selenium dioxide can reach about 10-20 tons. The selenium dioxide we sell, which is produced by Jiangxi Copper, is a well-known brand product and has gained a certain popularity and market share in the industry. Adhering to the business philosophy of "surviving by reputation and developing by specialty", our company insists on professional development and continues to explore in the field of sales in order to create more value for customers. Our efforts have been recognized by customers and brought us in-depth cooperation, and through the joint efforts with customers, the market share of our customers'products and the satisfaction rate of terminal customers improve significantly. The circulation cost is effectively controlled and a win-win situation for customers and end customers is achieved.

Asian Metal: How is the current selenium dioxide market in China going?

Ms. Wu: Downstream customers of selenium dioxide are mainly manganese flake plants, which probably account for about 80% of the total. At present, downstream manganese flake plants purchase inactively but their demand relatively keeps stable. The reason for the slack purchasing activities is that many plants had prepared a lot of selenium dioxide before they stopped production prior to the Spring Festival. Most customers think the price of selenium dioxide is rising too fast, so they mainly wait on the sidelines to avoid risk. However, in view of the increasing price of raw material crude selenium, many suppliers are optimistic about the market outlook and hold back from selling. Therefore, I believe that the price of selenium dioxide will continue to rise before June.

Asian Metal: The price of manganese flake 99.7%min has risen significantly since the end of last year. Will it push up the price of selenium dioxide in the first half of this year?

Ms. Wu: The price of manganese flake 99.7%min went up all the way from RMB10,000/t (USD1,544/t) at the end of 2020 to about RMB16,000/t (USD2,470/t) recently. However, the price of selenium dioxide wasn't driven up by it before March 2021. There are many factors affecting the price of selenium dioxide, such as the demand from manganese flake plants, the price of raw materials, the market trend of selenium powder, as well as the impact of economic environment. At the beginning of 2021, due to increasing demand for selenium powder, the price of the material increased, so didthat of crude selenium. Moreover, the purchase volume of manganese flake plants is stable at present. In such market situation, the price of selenium dioxide would begin to rise.

Asian Metal: Many manganese flake 99.7%min factories stopped production during the Spring Festival, and they plan to stop production again in April. How will this impact the selenium dioxide market?

Ms. Wu: As what I said before, the price of selenium dioxide is not just influenced by the demand from manganese flake plants. Although the selenium dioxide market saw much inventory these years, the stockpile and the production of the material has been on the decline as the production structure changed with more crude selenium being used for selenium powder production. Therefore, even if manganese flake plants take maintenance in March and April, which would result in 25%-50% production reduction, the price of selenium dioxide won't be affected and may go up further with inventory consumed. In addition, due to higher prices and tight supply of raw materials, the production of selenium dioxide falls short of the need.

Asian Metal: In the face of high stock and oversupply of selenium dioxide in recent years, do you think this problem will be alleviated in 2021?

Ms. Wu: In recent two years, due to the adjustment of the proportion of selenium powder and selenium dioxide produced by crude selenium, the output of selenium dioxide decreased, so the stock is always under consumption. Since the shelf life of selenium dioxide is about half a year to a year, the inventory of the material should be consumed soon. As far as I know, the monthly output of selenium dioxide in China is less than 120 tons, whilethe monthly consumption is about 150 tons. Therefore, the inventory of selenium dioxide would be used continuously and the oversupply might be alleviated in 2021.

Asian Metal: Recently, the price of selenium powder in China keeps surging, how do you think of this issue?

Ms. Wu: The rapid price rise of selenium powder is mainly related to the increase of international quotation and more purchases after the Spring Festival. Moreover, more inquiries in the international market made sellers hesitate to sell and lift prices. Because buyers are eager to make replenishment, the price of selenium powder repeatedly moves up. Currently, the price of imported selenium powder rises to RMB160-180/kg (USD24.70-27.79/kg) and the quotation of Chinese selenium powder reaches RMB150-170/kg (USD23.16-26.25/kg).

Asian Metal: Could you please briefly introduce your company's development plan in 2021?

Ms. Wu: Changes in the market this year also bring us some new changes. Previously, the proportion of selenium dioxide business was very large. But this year, as the market changed, we will timely increase the business proportion of other selenium products and pay more attention to the development of the import business.

Asian Metal: Thanks for your sharing. Wish you a prosperous business.

Ms. Wu: Thank you, wish Asian Metal better and better!