12th Rare Earth Summit
May 27-28, 2021
Hangzhou, Zhejiang, China
11th Aluminum Raw Materials Summit
May 20-21, 2021
Hangzhou, Zhejiang, China
9th Magnesium Summit
April 15-16, 2021
Hangzhou, Zhejiang, China
13th World InBiGeGa Forum
March 25-26, 2021
Hangzhou, Zhejiang, China
7th World Antimony Forum
June 13-14, 2019
Changsha, Hunan, China
7th Refractory & Abrasive Materials Summit 2019
May 23-24, 2019
Qingdao, Shandong, China
10th Aluminum Raw Materials Summit
May 16-17, 2019
Zhengzhou, Henan, China
11th Rare Earth Summit
May 9-10, 2019
Qingdao, Shandong, China
8th Magnesium Summit
April 11-12, 2019
Zhuhai, Guangdong, China
12th World InBiGeGa Forum
March 14-15, 2019
Zhuhai, Guangdong, China
6th World Manganese & Selenium Forum
May 21-22, 2018
Hainan Sanya, China
Interview with Mr. Zhang Hongyun, General Manager of Chongqing Wujiang Industry Group Trade Co., Ltd.
Chongqing Wujiang Industry Group Trade Co., Ltd. (the former Chongqing Mengdu Industry and Trade Co., Ltd., hereinafter referred to as Wujiang Trade) was established in Chongqing in September 2004 with a registered capital of 100 million Yuan. Wujiang Trade is a professional trading platform built by Chongqing Wujiang Industry (Group) Co, Ltd. to implement the strategy of “conglomeration and specialization”, relying on Wuling Manganese Industry, Wuling Silicon Industry, and Wuling PV Material Industry as its industrial bases. It is centered on selling electrolytic manganese and silicon metal, also trades on selenium dioxide, refinery coke, silica, coal, sulphur, ferroalloy and so on. Wujiang Trade has accomplished an annual trade amount of over 60,000t of electrolytic manganese and over 100,000t of silicon metal.
Zhang Hongyun: Power price unclear, silicon metal market in stagnant, but price is likely to decrease in the long run
----Interview with Mr. Zhang Hongyun, General Manager of Chongqing Wujiang Industry Group Trade Co., Ltd.
Asian Metal: Good day, Mr. Zhang! Thank you for taking the interview of Asian Metal. Firstly, please make a brief introduction of Wujiang Trade and its business.
Mr. Zhang: Wujiang Trade is a professional trading platform built by Chongqing Wujiang Industry (Group) Co, Ltd. to implement the strategy of “conglomeration and specialization”, relying on Wuling Manganese Industry, Wuling Silicon Industry, and Wuling PV Material Industry as its industrial bases. It is centered on selling electrolytic manganese and silicon metal, also trades on selenium dioxide, refinery coke, silica, coal, sulphur, ferroalloy and so on. Wujiang Trade has accomplished an annual trade amount of over 60,000t of electrolytic manganese and over 100,000t of silicon metal.
Asian Metal: Regarding the business of silicon metal, how about its current production situation? I learned that there are several new furnaces will be put into production later, please give a brief introduction to its capacity and the arrangement of the marketing.
Mr. Zhang: Chongqing Wujiang Industry Group Trade Co., Ltd., with a capacity of around 150,000t of silicon metal, has two subsidiaries: Chongqing Wuling’s Silicon Industry Co., Ltd. ( Registered in Qianjiang District) and Chongqing Wuling PV Material Co., Ltd. (Registered in Youyang County) and is the actual economic entity operating enterprises of Silicon Industry headquater. Wuling Silicon Industry, which is located in Zhengyang Industry Park in Qianjiang District, was built in accordance with the high starting point and high standard requirements of “advanced equipment, energy saving and environmental protection and recycling economy”. It has eight furnaces of 9,000kva, four of which have started production in late January 2010 and the other four furnaces will start production gradually in late May. Chongqing Wuling PV Material Co., Ltd, which is located in Longtan Heavy Industry Park in Youyang County, was put into construction in June, 2009. It is built with an annual capacity of 60,000t of silicon metal with ten furnaces of 12,500kva and three furnaces will start production in June. Wujiang Trade will be in charge of the sales of the whole group with a monthly trading volume of 8,000-9,000t of silicon metal. When all the furnaces of the group being put into production, the annual trading volume of silicon metal of Wujiang Trade will reach 150,000t, including the grades of 5-5-3, 4-4-1 and 4-2-1, etc.
As for the market, Wujiang Trade will arrange our sales work concerning the general market of silicon metal. With the concept of “enhancing domestic sales, expanding overseas market”, we will try to establish long-term and stable relationship with our clients in the domestic market in different fields and try to expand silicon metal export market.
Asian Metal: Is there any changes of silicon metal supply in the domestic and overseas markets after the company’s capacity expanded?
Mr. Zhang: In the overall silicon metal market, Wujiang Trade’s production capacity is only a tiny part, thus will not lays great influence on the market. Wujiang Trade will give full play to its strengths and contributes to the market stability of silicon metal. Silicon metal business of Wujiang Trade has three points of strength as follows： Firstly, sufficient power supply. The annual power supply of Wujiang Industry is one billion kWH with an investment of five billion Yuan. Meanwhile, Wujiang Industry has established good relationship with China Southern Power Grid, which could make silicon metal production stable all year round
Secondly, Wujiang Industry will give full play to its strength to integrate other sources, such as ores and coal which are suitable of silicon metal production to make silicon metal quality steady.
Thirdly, relying on the water transportation of Changjiang River, Wujiang Trade could arrange logistics and transportation well to lower cost and bring convenience to our customers.
Asian Metal: Silicon metal price rose continuously after the Spring Festival, how about the reasons?
Zhang: The continuous drought in Southwest China was the main reason that made silicon metal price rose sharply after the Spring Festival. Moreover, the continuous price rise of raw materials also promoted silicon metal price to increase.
Asian Metal: Silicon metal market began to calm down since late April and the price decreased continuously and some smelters in Guizhou even chose to stop production, how about your opinions on the current price drop? Moreover, the National Development and Reform Commission (NDRC) and the other two departments announced that China will end discounted power rates for some intensive users, effective from June 1, 2010, how about the influences it will lay on silicon metal industry?
Zhang: Both domestic and overseas silicon metal buyers were watching the market recently, expecting the price to drop further in rainy season. Power price is the most sensitive factor of silicon metal industry now. After NDRC announcing that China will end discounted power rates for some intensive users, there are different opinions towards the power price for rainy season. Some think that power price will decrease as that in the previous years and silicon metal price will also drop sharply; some think that the government has strong desire to end the discounted power rates for intensive users and local governments will also put it into practice strictly, so silicon metal price will not decrease but to rise this year; but some think that power price in rainy season will be influenced by the policy to some degree, the point is that the drop margin will not as large as in the previous years, which makes silicon metal price run on relatively high level.
Concerning the governmental policy, I think the general macro economy decides the execution potency of this policy. Silicon metal production is mainly supported by the small hydropower in rainy season, so it will not influenced much by this policy, especially that small and medium hydropower is difficult to be in line with national grid in rainy season. Therefore, this policy will make the power price in some areas lower than that in the previous years, but the general trend of silicon metal market will continue to move downward in rainy season.
Asian Metal: Silicon metal price is likely to drop sharply in rainy season in the previous years, what’s your opinion of the price trend in rainy season this year? How the national governance on silicon metal production’s environmental protection and energy-saving policy will influence the industry?
Zhang: I have three points to mention concerning this.
Firstly, the price drop of silicon metal in rainy season is an inertance and also a tendency.
Secondly, the environmental protection will be an important factor that influences silicon metal price. Currently, some small smelters could run with “disease”, but smelters which do not have complete environmental protection facilities will not be allowed to run in the future as the government will lay more emphasis on it.
Thirdly, market demand is the key factor that decides the output of silicon metal. The national policy of energy saving and consumption reduction could only eliminate part of the backward production capacity of silicon metal, and will not lay great influence on the overall market because newly-built capacity is even bigger than the eliminated capacity.
As for the price of silicon metal, it is decided by the overall demand. The production capacity of silicon metal in China is decentralized and the price mechanism is imperfect. Silicon metal price is likely to decline in rainy season and may even run around the production cost line.
Asian Metal: I learned that there are many stocks of silicon metal in Huangpu, how about current supply and demand situation? How about downstream purchasing, active or not? Will the demand see any changes in the near future?
Zhang: Consumers were inactive in purchasing silicon metal in the past several weeks with the prediction that the price will drop sharply in rainy season, so demand for purchasing needs to be released. Generally speaking, current stock of silicon metal in the market is large and demand from downstream industries may be released in the near future.
Asian Metal: How do you think silicon metal market will go in the near future?
Mr. Zhang: Affected by the policy that China will end discounted power rates for some intensive users, silicon metal market will be in stagnant for a while and all parties are inclined to watch the market, moreover, silicon metal price may even rise a little. However, silicon metal price will continue to move down in rainy season. Current silicon metal is in stagnant and all parties are waiting for the power price to be settled.
Asian Metal: Thank you, Mr. Zhang! Thanks for your precious time for this interview. We hope your business is booming.
Mr. Zhang: Thank you!
Mr. Zhang: Wujiang Trade is a professional trading platform built by Chongqing Wujiang Industry (Group) Co, Ltd. to implement the strategy of “conglomeration and specialization”, relying on Wuling Manganese Industry, Wuling Silicon Industry, and Wuling PV Material Industry as its industrial bases. It is centered on selling electrolytic manganese and silicon metal, also trades on selenium dioxide, refinery coke, silica, coal, sulphur, ferroalloy and so on. Wujiang Trade has accomplished an annual trade amount of over 60,000t of electrolytic manganese and over 100,000t of silicon metal.
Asian Metal: Regarding the business of silicon metal, how about its current production situation? I learned that there are several new furnaces will be put into production later, please give a brief introduction to its capacity and the arrangement of the marketing.
Mr. Zhang: Chongqing Wujiang Industry Group Trade Co., Ltd., with a capacity of around 150,000t of silicon metal, has two subsidiaries: Chongqing Wuling’s Silicon Industry Co., Ltd. ( Registered in Qianjiang District) and Chongqing Wuling PV Material Co., Ltd. (Registered in Youyang County) and is the actual economic entity operating enterprises of Silicon Industry headquater. Wuling Silicon Industry, which is located in Zhengyang Industry Park in Qianjiang District, was built in accordance with the high starting point and high standard requirements of “advanced equipment, energy saving and environmental protection and recycling economy”. It has eight furnaces of 9,000kva, four of which have started production in late January 2010 and the other four furnaces will start production gradually in late May. Chongqing Wuling PV Material Co., Ltd, which is located in Longtan Heavy Industry Park in Youyang County, was put into construction in June, 2009. It is built with an annual capacity of 60,000t of silicon metal with ten furnaces of 12,500kva and three furnaces will start production in June. Wujiang Trade will be in charge of the sales of the whole group with a monthly trading volume of 8,000-9,000t of silicon metal. When all the furnaces of the group being put into production, the annual trading volume of silicon metal of Wujiang Trade will reach 150,000t, including the grades of 5-5-3, 4-4-1 and 4-2-1, etc.
As for the market, Wujiang Trade will arrange our sales work concerning the general market of silicon metal. With the concept of “enhancing domestic sales, expanding overseas market”, we will try to establish long-term and stable relationship with our clients in the domestic market in different fields and try to expand silicon metal export market.
Asian Metal: Is there any changes of silicon metal supply in the domestic and overseas markets after the company’s capacity expanded?
Mr. Zhang: In the overall silicon metal market, Wujiang Trade’s production capacity is only a tiny part, thus will not lays great influence on the market. Wujiang Trade will give full play to its strengths and contributes to the market stability of silicon metal. Silicon metal business of Wujiang Trade has three points of strength as follows： Firstly, sufficient power supply. The annual power supply of Wujiang Industry is one billion kWH with an investment of five billion Yuan. Meanwhile, Wujiang Industry has established good relationship with China Southern Power Grid, which could make silicon metal production stable all year round
Secondly, Wujiang Industry will give full play to its strength to integrate other sources, such as ores and coal which are suitable of silicon metal production to make silicon metal quality steady.
Thirdly, relying on the water transportation of Changjiang River, Wujiang Trade could arrange logistics and transportation well to lower cost and bring convenience to our customers.
Asian Metal: Silicon metal price rose continuously after the Spring Festival, how about the reasons?
Zhang: The continuous drought in Southwest China was the main reason that made silicon metal price rose sharply after the Spring Festival. Moreover, the continuous price rise of raw materials also promoted silicon metal price to increase.
Asian Metal: Silicon metal market began to calm down since late April and the price decreased continuously and some smelters in Guizhou even chose to stop production, how about your opinions on the current price drop? Moreover, the National Development and Reform Commission (NDRC) and the other two departments announced that China will end discounted power rates for some intensive users, effective from June 1, 2010, how about the influences it will lay on silicon metal industry?
Zhang: Both domestic and overseas silicon metal buyers were watching the market recently, expecting the price to drop further in rainy season. Power price is the most sensitive factor of silicon metal industry now. After NDRC announcing that China will end discounted power rates for some intensive users, there are different opinions towards the power price for rainy season. Some think that power price will decrease as that in the previous years and silicon metal price will also drop sharply; some think that the government has strong desire to end the discounted power rates for intensive users and local governments will also put it into practice strictly, so silicon metal price will not decrease but to rise this year; but some think that power price in rainy season will be influenced by the policy to some degree, the point is that the drop margin will not as large as in the previous years, which makes silicon metal price run on relatively high level.
Concerning the governmental policy, I think the general macro economy decides the execution potency of this policy. Silicon metal production is mainly supported by the small hydropower in rainy season, so it will not influenced much by this policy, especially that small and medium hydropower is difficult to be in line with national grid in rainy season. Therefore, this policy will make the power price in some areas lower than that in the previous years, but the general trend of silicon metal market will continue to move downward in rainy season.
Asian Metal: Silicon metal price is likely to drop sharply in rainy season in the previous years, what’s your opinion of the price trend in rainy season this year? How the national governance on silicon metal production’s environmental protection and energy-saving policy will influence the industry?
Zhang: I have three points to mention concerning this.
Firstly, the price drop of silicon metal in rainy season is an inertance and also a tendency.
Secondly, the environmental protection will be an important factor that influences silicon metal price. Currently, some small smelters could run with “disease”, but smelters which do not have complete environmental protection facilities will not be allowed to run in the future as the government will lay more emphasis on it.
Thirdly, market demand is the key factor that decides the output of silicon metal. The national policy of energy saving and consumption reduction could only eliminate part of the backward production capacity of silicon metal, and will not lay great influence on the overall market because newly-built capacity is even bigger than the eliminated capacity.
As for the price of silicon metal, it is decided by the overall demand. The production capacity of silicon metal in China is decentralized and the price mechanism is imperfect. Silicon metal price is likely to decline in rainy season and may even run around the production cost line.
Asian Metal: I learned that there are many stocks of silicon metal in Huangpu, how about current supply and demand situation? How about downstream purchasing, active or not? Will the demand see any changes in the near future?
Zhang: Consumers were inactive in purchasing silicon metal in the past several weeks with the prediction that the price will drop sharply in rainy season, so demand for purchasing needs to be released. Generally speaking, current stock of silicon metal in the market is large and demand from downstream industries may be released in the near future.
Asian Metal: How do you think silicon metal market will go in the near future?
Mr. Zhang: Affected by the policy that China will end discounted power rates for some intensive users, silicon metal market will be in stagnant for a while and all parties are inclined to watch the market, moreover, silicon metal price may even rise a little. However, silicon metal price will continue to move down in rainy season. Current silicon metal is in stagnant and all parties are waiting for the power price to be settled.
Asian Metal: Thank you, Mr. Zhang! Thanks for your precious time for this interview. We hope your business is booming.
Mr. Zhang: Thank you!