Optimistic on demand for manganese additive in 2020

Asian Metal: Mr. Song, firstly please give us a brief introduction of your company and business.

Mr. Song: AMG Aluminum is a world-leading grain refiner and master alloy producer and has more than 350 employees and five plants with ISO9001 quality management system certification worldwide, including two in the United States, one in the U.K., one in Brazil and one in China. It supplies customers with a wide range of products, such as grain refiners, master alloys, compacted alloying additives (ALTAB), chemical fluxes and rod feeders. Over the past eight decades, AMG Aluminum kept providing grain refiners, master alloys and alloying additives with stable and reliable quality to customers around the world and gained a high reputation globally. Being customer-oriented and technology-driven constantly, the company dedicates to continuous innovation, better quality and excellent technology to respond to customers' demand in a rapid manner. Attached to Advance Metallurgical Group and headquartered in Wayne, Pennsylvania, AMG Aluminum consists of AMG Aluminum North America, AMG Aluminum U.K., AMG Aluminum Brazil, AMG Aluminum Mexico and AMG Aluminum China.

Casting plants need grain refiner with better quality due to increasing requirements on quality of key materials during the casting process of aluminum alloy, so AMG Aluminum developed a modified and more efficient grain refiner named TiBAl ADVANCE grain refiner

Founded in 2008 and being the sole subsidiary of AMG Aluminum in China, AMG Aluminum China Limited produces alloying additives and acts as AMG Aluminum's sales center in China that sells products from AMG Aluminum North America, AMG Aluminum U.K. and AMG Aluminum Brazil and records an annual sales revenue of RMB250 million (USD36.00 million).

Asian Metal: Please talk something about existing types and application fields of manganese additive.

Mr. Song: After working out ALTAB brand alloying additive in 1983 and obtaining the patent, LSM, AMG Aluminum UK plant, played as the largest producer of alloying additives in the following decades with the products of manganese additive, iron additive, titanium additive and chrome additive. Manganese additive is mainly used to add manganese to aluminum alloy during the casting process. Developed countries and regions with strict environmental protection requirements, such as the United States, Canada, Western Europe and Australia, generally adopt zero flux based manganese additive, which is of slight environmental impact and low aluminum liquid burning loss in casting process, while Russia, Central Europe, Eastern Europe, South America, Africa and most areas in China still consume additive with flux. From 2010 on, some high-end customers in China gradually began to use zero flux based manganese additive to improve product quality and lower cost as the material was able to reduce burning loss and defluorination.

As shown in Picture 3, the bigger block used the manganese additive with potassium hexafluoroaluminate while the smaller one used the manganese additive with aluminum powder. By contrast, the smaller block is of brighter physical appearance and metallic luster. 

Asian Metal: What are your core advantages as a major Chinese manganese additive producer?

Mr. Song: First of all, as the inventor of alloying additive, AMG Aluminum owns a production history of 36 years and has close cooperation with most aluminum processing companies in the world. It gets feedbacks on products by visiting customers in a continuous and steady manner. We have a deep insight into the production process of alloying additive and are ahead of other peers in terms of production equipment and process control.

Secondly, AMG Aluminum owns five plants that passed ISO9001 quality management system certification and five independent testing laboratories, including the joint laboratory established by AMG Aluminum China and national iron and steel materials testing center NCS Testing Technology Co., Ltd., to ensure product quality. With a more advanced well-equipped laboratory, AMG Aluminum U.K. co-establishes a research body with one university to develop new products, test and analyze products with problems arising in the application process and put forward optimization program and provides testing service for Rolls Royce.

Thirdly, we have a stable global supply chain system and own advantages in purchasing raw materials, realizing globalization of sales network and procurement channel in its true sense.

Asian Metal: What are the changes of manganese additive consumption in the world this year compared with that in 2019? What will be the consumer price index like in 2020?

Mr. Song: Aluminum is a metal with optimistic outlook in the future and the demand from our customers is increasing steadily year by year. Affected by the China-U.S. trade friction and price trend in metal market, U.S. customers placed some orders with European suppliers in 2019. In addition, manganese additive from South Africa enjoys a U.S. import tariff exemption while that from China has to pay a high

With alleviation of China-U.S. trade friction, we are optimistic about the market in 2020. Manganese prices stand low at present and customers strongly desire to sign long-term orders. By the end of 2019, AMG Aluminum China had signed orders for 2020 with several customers with the purchase amount reaching thousands of tons.

Asian Metal: What are the development barriers and future opportunities in current manganese additive industry?

Mr. Song: Manganese additive suppliers see fierce competition and thin profit margin. In my opinion, we can improve our competitiveness from following three aspects. In terms of procurement, we will be competitive in prices for raw materials by strategically cooperating with upstream manganese flake producers. In terms of production, we will ensure stable product quality with lean management and equipment automation, which may cut the investment in human resources. In terms of sales, we will maintain long-term and stable orders from customers by fixing reasonable treatment charges.

Asian Metal: Manganese flake is one of key raw materials of manganese additive and its prices reach the lowest level in recent three years. What are the impacts on manganese additive industry?

Mr. Song: We sign raw material orders with manganese flake producers in a back-to-back way, so price changes in manganese flake market don't make great impacts on our production. As manganese flake prices stay low now, we suggest customers to sign long-term orders with fixed price, fixed volume and fixed delivery date.

Asian Metal: May I know your views on manganese flake price trend in Q1 2020?

Mr. Song: We expect slight increases in manganese flake prices after the Spring Festival. However, prices wouldn't fluctuate significantly with sufficient supply.

Asian Metal: Thank you for accepting our interview. With the upcoming Spring Festival, we wish AMG Aluminum China Limited a new beginning in the year of rat and wish you a happy Chinese New Year!

Mr. Song: Thank you. Wish Asian Metal a brighter future!