Zhu Shibin: Further development of selenium counts on high-purity products

Asian Metal: Good afternoon, Mr. Zhu. Thank you for granting this interview. Could you please make a brief introduction of your latest plan for production?

Zhu: Our annual output of selenium products reached 1,000t in 2009, and has increased to over 1,200t by the end of 2013, which helps us keep the first place among global selenium producers. As for 2014, we aims to achieve a total output of 1,300-1,500t of selenium products , making minor adjustments according to the market performance.

In addition, we produced 300-400t of tellurium products in 2013. We will expland production field to other rare metals like In, Ga, Ge and Bi, maintaining advantages on selenium and tellurium at the same time.

Asian Metal: Selenium dioxide prices have shown signs of separating from selenium 99.9% price trend since the beginning of 2014, do you think it is a normal reflection of demand and supply?

Zhu: More selenium dioxide producers turn to purchase crude selenium rather than refined selenium in order to reduce costs. And manganese flake is the direct downstream industry of selenium dioxide, while refined selenium is mainly used in glass, ceramic and solar energy industries. Therefore, it is normal that price trends of the two products differ from each other from time to time.

Asian Metal: With selenium market digging down and oversupply becoming more serious, some suppliers start accepting D/A payments. Does it mean the spot cash will be edged out?

Zhu: The amount of suppliers has increased substantially amid slumping selenium market since 2008, resulting in cut-throat competition and the popularity of D/A payments under the overall unfavorable economic conditions. But it will only intensify financial pressure on suppliers. We still require spot cash among 90% of our deals.

Asian Metal: As we know, selenium outputs are increasing in China, so some participants call on reducing selenium imports; while according to data released by China customs, over 1,700t of selenium were imported in 2013. What is the main reason for imports keeping at a high level?

Zhu: First of all, a number of the imported selenium will be exported after processed, which causes no trouble for Chinese domestic market. Besides, purchasers make decision between buying domestic selenium or imported selenium on the basis of price comparison, and it obeys market principles.

Asian Metal: Some manganese flake plants have established their own selenium dioxide smelting workshops in China, will it bring further challenges for selenium suppliers?

Zhu: The behavior itself does not mean to replace purchases from the selenium dioxide market; on the contrary, manganese flake plants only aim to make supplements during periods when selenium prices are fluctuating. Actually, it is more risky for the plants to produce selenium dioxide without better experiences over insiders. On the one hand, the production will cause enormous losses for the society by inadequate operations as selenium dioxide is an industrial product with highly toxic; on the other hand, the production costs will be much higher if they misjudge the market trend.

Asian Metal: How do you see the performance of Fanya Exchange’s listing as one of its selenium suppliers?

Zhu: Selenium trading has performed steadily on the platform in the recent two months. We believe it will benefit selenium market in the long term, though it may take another 1-2 years for the listing to have a significant influence on the spot market, referring to indium and other rare metals.

Asian Metal: Will you enhance the development of high purity selenium products in face of weak demand from traditional downstream industries like manganese flake, glass and ceramics?

Zhu: In fact, participants widely agreed that demand from traditional downstream industries is unlikely to increase in the coming 2-3 years. Therefore, further development of selenium is largely counting on high-purity products. Over 10% of our selenium outputs are high-purity products, which directly applied in high-end industries like infrared ray, thin film, etc. And we hold optimistic attitude towards the future market, with shipments for these high-purity products to increase by 100-200% in the next 1-2 years.

Asian Metal: Do you foresee any difficulties in Chinese selenium market in H2 of 2014?

Zhu: Selenium prices have dropped to an extremely low level since 2013, and most selenium suppliers are already suffering from losses. So obviously, the situation could not be worse.

Asian Metal: Thanks for your time to take this interview and we wish a bright future for Vital.