Brown fused alumina market to see balanced supply and demand in 2018

Asian Metal：Hello, Mr. Niu. Thank you for accepting Asian Metal's interview.
As a well-known company in brown fused alumina industry, please give a brief introduction of your company's production scale and basic information, such as main businesses, production capacity, development direction, etc.

Mr. Niu: Our company mainly produces abrasive materials like brown fused alumina, calcined abrasive, coated abrasive, accumulation abrasive, magnetic abrasive and so on with an annual output of 30,000t. With the research innovation and market-orientation, we continuously introduce new products with high-tech and high added-value on the basis of traditional products to realize our transformation and upgrade and create Hongji as a company which owns technology, innovation and energy.

Asian Metal：What was the output of your company's brown fused alumina in 2017 when environmental inspections were extremely strict? Whether the actual output of the material declined significantly or not in 2017 compared with that in 2016?

Mr. Niu: Our company produced 26,000t of brown fused alumina in 2017 with a slight decrease from 2016.

Asian Metal：Where is your company's brown fused alumina largely sold and what is the proportion of exports?

Mr. Niu: We mainly sell our brown fused alumina in Chinese and Asian markets, and are actively exploring the European market. The proportion of sales in Chinese and overseas markets occupies almost half respectively.

Asian Metal：Currently, upstream and downstream market players generally take a watchful attitude after they returned to the market from the 2018 Spring Festival holiday for more than one month. Is there any decrease in actual market prices and why?

Mr. Niu: Market prices inched up after the Spring Festival holiday, and then fell back and stabilized. At present, market prices stand relatively steady.

Asian Metal：What's your opinion on main factors which influence the development of Chinese brown fused alumina industry at the moment?

Mr. Niu: I think there are three main reasons: the first is the influence on the production and raw material brought by environmental protection policy; the second is the product specialization and innovation resulted from shrinking traditional market and the third is the market exploration in accordance with current emerging industries.

Asian Metal：If the environmental protection policy continues to be strict in China, will you transfer your company to overseas market from the perspective of producers?

Mr. Niu: Environmental protection requirements will be stricter, which is unsurprising and inevitable in the process of development, and brown fused alumina companies will consider comprehensive costs of smelting and low-end manufacturing. From the aspect of development history of developed countries, it is reasonable to transfer some high energy consumption and low-end manufacturing parts.

Asian Metal：What do you think of the development trend of Chinese abrasive industry in 2018?

Mr. Niu: Considering continuously strict environmental protection policy in 2018, brown fused alumina companies have reached emission standards by improving and increasing environmental protection facilities. The supply and demand gradually become balanced and the supply of the raw material will also be stable. Moreover, prices for some raw materials might go down step by step. As a result, abrasive prices would show a steady trend.

Asian Metal: Brown fused alumina industry sees fierce competition for the time being and companies seek new development direction driven by the environmental protection policy and rising costs. So in your opinion, what kind of problems will ordinary brown fused alumina companies encounter?

Mr. Niu: Many problems appear in ordinary brown fused alumina companies like environmental protection, excessive capacity, price competition among products with the same quality, shrinking traditional market, etc. Brown fused alumina companies should face these problems to find a proper position for themselves and their products. Each enterprise has its own method for the transformation and upgrade which need to be done on the basis of its advantages. They can specialize their products to reduce costs, explore new markets, or upgrade new products with high added-value. Many companies in brown fused alumina industry have conducted the transformation and upgrade now. What we face now is what German and Japanese companies encountered previously, but I am optimistic about the industry development. Many companies are under transformation and upgrade. Wish abrasive companies to achieve successful transformation and upgrade and become stronger!