Jinlong Manganese: dealing with violent market fluctuations cautiously and optimistically

Asian Metal: Mr. Huang, thank you very much for accepting Asian Metal's interview. Could you please introduce your company's operating situation briefly? What are your company's main products?

Mr. Huang: Generally speaking, our company's production and operation situation is satisfactory currently. After more than ten years of development, we have grown from a small mining factory to a private enterprise specialized in manganese products with fixed assets and a registered capital of RMB50 million (USD7.25 million) and RMB10 million (USD1.45 million) respectively. Thanks to excellent production technology, our company passed the ISO9001: 2008 quality certification as early as 2009, helping the company's production management to step on a new level. With a number of economic and technical indicators better than the international level, our products sell well to major domestic steel plants and traders, and customers in Southeast Asia, Europe and the United States. Currently, we mainly engage in high, medium and low carbon ferromanganese, manganese metal, electrolytic manganese, Al-Mn-Si, ferroaluminum, silicomanganese and other manganese related ferroalloys, manganese carbonate ore powder, manganese dioxide powder, manganese sand filter and other products.

Asian Metal: your company began to produce manganese flakes since last October, so could you please briefly introduce your electrolytic manganese plant?

Mr. Huang: Our company has been producing manganese flakes and the Manganese Flake Branch in Luxi with a 10,000tpy production line has been successfully put into operation on the 19th of October, 2016. In order to meet the market demand, we expanded the capacity by 5,000t in November, 2016, and by doing so, our daily output increased from around 40t to 60t.

Asian Metal: In addition, your company set up the Wuxi Office in the middle of last year, could you please introduce the operation of Office?

Mr. Huang: upholding the basic business philosophy of "Everything for customers, everything from innovation", our company has earned its reputation for excellent product quality and service and led the way in the industry. Our company has an office in Wuxi, that is, Wuxi Hongyun Burden, whose sales and operating conditions have been satisfactory so far and the core value of "Quality changes the world" is being promoted throughout the whole company.

Asian Metal: Last year, import prices for manganese ore climbed consistently, pushing manganese related alloy prices to move up accordingly. However, prices started to drop sharply after the Spring Festival. What do you think of sudden movements in price in the manganese market?

Mr. Huang: I think prices for manganese ore and manganese alloy are mainly determined by market conditions. Prices would rise when the supply falls short of the demand. It's hard to say whether prices will go up or slip in the long run. As electrolytic manganese prices advanced as a result of continuously rising import prices for manganese ore, the majority of customers held a wait-and-see attitude, slowing down market transactions. Moreover, demand for manganese metal which needs electrolytic manganese to produce increased, so sometimes the supply of electrolytic manganese may fall behind of market demand, resulting in rising prices and unstable market conditions. Nevertheless, manganese ore prices dropped sharply after the Spring Festival owing to heavy stocks of manganese ore at domestic ports and weakened demand for manganese alloy after the Spring Festival resulting from steel plants' production limitation and pre-stocking before the holiday. Currently, BHP Billiton has made three quotations for manganese ore for March with Comilog having made two, but manganese ore prices remain under severe downward pressure. The sharp drop in manganese ore and manganese alloy prices triggered the decline in domestic electrolytic manganese prices to some extent.

Asian Metal: Demand for electrolytic manganese from steel plants first increased in the second half of 2016, but then shrank towards the end of the year. What do you think of demand for electrolytic manganese from steel plants in the future?

Mr. Huang: Affected by the country's capacity reduction policy, steel plants will adjust their production based on market conditions in the future and accordingly will purchase manganese-related alloy and electrolytic manganese based on market conditions to control production costs. In the long run, it depends on market demand and the efficiency of meeting the market demand. However, in the short term, demand from steel mills will be sporadic in January and February due to production limitation and pre-stocking late last year.

Asian Metal: Foreign customers preferred to cooperate with producers who can supply manganese ingot and manganese briquette stably over the past two years. So will you consider supplying overseas markets when conditions permit?

Mr. Huang: We definitely will consider supplying the foreign market gradually on the premise of guaranteeing stable supply in the domestic market, when conditions permit. In fact, we are trying to find high-quality foreign customers to expand our business.

Asian metal: I learnt that your company mainly engages in manganese and chrome related products. Could you share your company's future development plan with us?

Mr. Huang: Our company has made a qualitative leap during recent years with total sales of RMB500 million (USD7.25 million) last year. At present, 85% of our customers are domestic steel plants. We hope that we can earn a reputation for excellent product quality through technological innovation and customer service.

Asian Metal: Thank you very much for accepting Asian Metal's interview, I wish everything goes well with your work and also wish your company a prosperous future!

Mr. Huang: Thank you!