Asian Metal visits Tongyuan Magnesium, Xintian Magnesium Alloy, Yufeng Magnesium Alloy, Taida Coalification and Tianlong Magnesium

Bruce Zhang, General Manager of Minor Metal Department and Daphne Zhang, Senior Analyst of Minor Metal Department; both from Asian Metal visited Shaanxi Fugu Tongyuan Magnesium Co., Ltd., Fugu Xintian Magnesium Alloy Co., Ltd., Fugu Yufeng Magnesium Alloy Co., Ltd., Fugu Taida Coalification Co., Ltd., Fugu Jingfu Coal Co., Ltd. and Yulin Tianlong Magnesium Co., Ltd. during November 11-14th and engaged in discussions covering every aspects of magnesium metal market in 2014 with the host companies and exchanged ideas for the market trend in the remainder of Q4.

On the evening of November 11, Bruce Zhang and Daphne Zhang reached Yilin, Shaanxi and were given warm reception by Mr. Wang Weifeng, Director from Fugu Taida Coalification Co., Ltd. and Mr. Ren Wei, Sales Manager from Taida. They discussed the current magnesium ingot market state and exchanged opinions for the future market trend, and also thought that magnesium market trend is less optimistic if oversupply is hard to change in a short time. Commenting on the coming Magnesium Summit to be held in Chengdu on April 16-17, colleagues from Taida confirmed that they will attend it and hope to see more insiders on the coming summit.

On the morning of November 12, Asian Metal arrived at Xinmin town in Fugu, Shaanxi, and they visited Fugu Tongyuan Magnesium Co., Ltd. Mr. Zhang Mingke, Vice General Manger from Sales Department in Tongyuan and Mr. Wang Cheng, Vice General Manager from Financial Department from Tongyuan welcomed their coming. Currently magnesium ingot market is trapped in sluggish state owing to weak demand and oversupply, and Tongyuan Magnesium increases the output for small pieces on 100g, 300g and 500g to 600 tons, and the normal products on 7.5 Kg is about 800 tons. Referring to the current market state, Mr. Zhang from Tongyuan revealed that tight funds and heavy stocks from suppliers could be the main reasons for price reduction in Q4.

On the afternoon of November 12, Bruce Zhang and Daphne Zhang from Asian Metal visited Fugu Xintian Magnesium Alloy Co., Ltd., and shared ideas on price reduction in Q4 with Mr. Yu Shefei, Sales Director from Xintian Magnesium Alloy. Mr. Yu confirmed that tight funds and heavy stocks from Shaanxi could be the main reasons for price decline, and some suppliers who face heavy pressures even could mark down much lower offers. However, slow demand in the spot market just restrains market transactions, and output reduction could be the only way to guarantee price stable or up slightly in the remainder of Q4. Meanwhile, Mr. Yu gave highly comments on fair, objective, prompt information from Asian Metal.

On the morning of November 13, Asian Metal visits Fugu Yufeng Magnesium Alloy Co., Ltd., and exchanged opinions on market state with Mr. Wang Shaowen, Vice General Manager of Sales Department and Mr. Lv Jianxiong, General Manger from Producing Department in Yufeng. Mr. Wang confirmed that there is no bank loan from their company, so the cost for magnesium ingot is less than other companies in Shaanxi, but price reduction continually in Q4 really makes him lack confidence in the future trend. Mr. Wang just increases the output for small pieces to 200 tons now to meet the challenges, which are mainly for 100g and 300g. Meanwhile, they could produce about 900 tons for 7.5 kg magnesium ingot per month. In addition, Mr. Wang spoke highly on past magnesium summit held by Asian Metal, and he revealed that he will attend the coming magnesium summit in Chengdu to get more information and have the chance to meet more insiders.

On the afternoon of November 13, Asian Metal visited Fugu Taida Coalification Co., Ltd., and welcomed by Mr. Liu Xufeng, President from Taida and Mr. Dong Feiyun, General Manger from Taida. Currently the monthly output for Taida is about 2,200 tons, and the cost for magnesium ingot is less than other peers in Shaanxi owing to the circular economy mode on production. Commenting on the challenge and risks on magnesium ingot market, Mr. Liu confirmed that even though peers in the industry thought that output reduction could restrain price decline further, it is hard to realize in cold winter. In Q4, the cold weather restrains smelters and force them to cut down or suspend production for fear of damage on pipe and equipment; meanwhile, most suppliers are with heavy loan from bank, production suspension will lead them in a harsh state; thirdly, if they suspend now, it is hard for them to get qualified workers later. Different production way and low energy cost could be effective way to restrain price to go down further, but it is hard to achieve in a short term. From the whole view, oversupply state in Shaanxi is hard to be changed in a short term, so price reduction will keep to be seen. Commenting on the 4th magnesium summit in Chengdu, Taida will attend and hope to broaden the export business through summit.

On the morning of November 14, Asian Metal visited Fugu Jingfu Coal Co., Ltd., and exchanged opinions on marked state and trend for the remainder of Q4 with Mr. Wang Tao, Yu Ning and Zheng Jie. The monthly output for Jingfu is about 2,100 tons, and the products from this company are mainly sold to domestic markets. Referring to magnesium summit in 2015 held by Asian Metal, Jingfu Coal will attend it and expect improvements on market trend for coming year.

On the afternoon of November 14, Asian Metal visited Yulin Tianlong Magnesium Co., Ltd., and shared market trend with Mr. Dang Junwei, Sales Manger from Tianlong. All of them thought that oversupply state is hard to be changed in a short term, so price reduction will go on as tight funds and heavy stocks will make suppliers mark down offers further. Tianlong Magnesium broadens the sales channels, currently they could produce about 1,500 tons per month, 20% for export and 30% for Ti smelters, and the remaining are sold to domestic market.