12th Rare Earth Summit
May 27-28, 2021
Hangzhou, Zhejiang, China
11th Aluminum Raw Materials Summit
May 20-21, 2021
Hangzhou, Zhejiang, China
9th Magnesium Summit
April 15-16, 2021
Hangzhou, Zhejiang, China
13th World InBiGeGa Forum
March 25-26, 2021
Hangzhou, Zhejiang, China
7th World Antimony Forum
June 13-14, 2019
Changsha, Hunan, China
7th Refractory & Abrasive Materials Summit 2019
May 23-24, 2019
Qingdao, Shandong, China
10th Aluminum Raw Materials Summit
May 16-17, 2019
Zhengzhou, Henan, China
11th Rare Earth Summit
May 9-10, 2019
Qingdao, Shandong, China
8th Magnesium Summit
April 11-12, 2019
Zhuhai, Guangdong, China
12th World InBiGeGa Forum
March 14-15, 2019
Zhuhai, Guangdong, China
6th World Manganese & Selenium Forum
May 21-22, 2018
Hainan Sanya, China
Interview with Mr. Denis, General Manager of LLC "KRAFT"
LLC “KRAFT”, established in 2006, is a Russian company engaged in non-ferrous metal trading, and started import and export business from 2010. Located in Moscow , the capital of Russia , the company mainly deals in minor metals such as silicon, magnesium, manganese and so on. Since its inception, the company adheres to the professional development path, and strives to create greater benefits for customers, growing together with customers.
Denis: Stable development expected in Russian magnesium market
----Interview with Mr. Denis, General Manager of LLC "KRAFT"
Asian Metal: Good morning! Mr. Denis. Thank you for your time bo be interviewed by Asia Metal. Please give a brief introduction to your company first.
Denis: Our company was established in 2006, engaged in non-ferrous metal trading business. And it is located in Top Radishchevsky, 13 Moscow.
Asian Metal: What metal products are your company mainly engaged in?
Denis: We currently have business related to silicon, magnesium, manganese and bismuth ingot. And we hope to establish a long-term partnership with Chinese producers in coming years.
Asian Metal: Could you introduce to us the current Russian minor metals market?
Denis: Under the influence of the global economic crisis in 2008, some small Russian trading companies have been closed down, and the market slided straight down. While many large producers were just striving to maintain tiny output. Anyway, the market will generally not take a down-trend this year. Russian consumption of minor metals has been lagging behind in recent years. For instance, the annual demands for silicon, magnesium and bismuth are about 50,000 tons, 13,000 tons and 15 tons respectively. The gradual recovery of demand this year may propel the market forward.We are cautiously optimistic about the market in the fourth quarter.
Asian Metal: Commenting on magnesium, it is known that there are two big magnesium producers in Russia , but a large quantity of magnesium ingot is still imported from China . Do you think that magnesium ingot from China enjoys the price advantage? And how do you think the current Russian magnesium ingot market?
Denis: We tried to establish a partnership with Avisma in 2007, but because we purchase in small quantitiest, and the two large Russian magnesium producers tend to sell in long-term contracts, it is difficult to make direct purchase from them. In Russian spot market, the exchanging volume in a single trading is usually 20-40 tons. After the market got recovered gradually in the fourth quarter of 2009, supply and demand improved as well, and magnesium price began to rise slightly. The spot price for magnesium ingot in Russia increased from RUB105-110/kg in the fourth quarter of 2009 to RUB120-125/kg in the second quarter of 2010 and up further to RUB140-145/kg at the beginning of the third quarter. The third quarter follows the up-trend and the price holds firm until now. As to magnesium ingot with Chinese origin, we need to pay 15% import duty on the product, and 18% value added tax after that. Nevertheless, the price of magnesium ingot imported from China still has some advantages in the Russian spot market, so many traders prefer to import from China . For instance, we bought 20t of magnesium ingot at USD2,700/t FOB China in the middle of August with a shipment of 45 days. The transportation cost is USD114/t. Plus 15% import duty and 18% VAT, our purchasing cost is USD3,710/t or RUB115/kg delivered to the warehouse, so the price is still lower than that of magnesium ingot from Russian producers.
Asian Metal: What are the magnesium consuming industries in Rusia? How about the supply in the spot market?
Denis: Desulfurizing in steel making, titanium and aluminum alloy are the three major consuming sectors for magnesium in Russia. Crude steel output in Russia experienced a 12.6% decline YOY from 68,500,000 tons to 59,900,000 tons. H1 output of crude steel totaled 26,600,000 tons, 30.4% down compared to the same period of 2008. It’s therefore not difficult to see that the construction and manufacturing industries have not yet recovered. The instability of crude steel demand will inevitably bring in great uncertainty in the performance of magnesium powder which is used as desulferizer in steel making. Besides, titanium production in CIS also fell dramatically after the economic crisis. For instance, the annual production capacities of titanium in Russia, Ukraine and Kazakhstan came to 30,000 tons, 9,000 tons and 20,000 tons respectively before the economic crisis, all ranking within the world top six producers, but the great fall-down in output after the crisis exerts negative influence on magnesium consumption. I think the magnesium supply in the spot market generally keeps stable, and that’s why the price has remained at RUB140-145/kg during the past two months.
Asian Metal: Is the supply of magnesium in Russian metal stable this year? How does the economic crisis affect Russian magnesium market?
Denis: The supply is largely stable, but the import volume has remained low since the economic crisis.
Asian Metal: What kinds of products except magnesium ingot and manganese lump does your company import from China? How do you fix the price? It there a pricing formula?
Denis: We’re planning to import some silicon metal and bismuth ingot from China. We fix the price according to Asian Metal’pricing system.
Asian Metal: We learnt that many dealers quote a relatively high price for magnesium ingot as well as other metals in Russian spot market. How do you think it? Please explain to us why the price is comparatively high based on your own pricing style.
Denis: Usually we do not hold inventories but only make purchases after receiving orders. There are two reasons that why the spot price in Russian market keeps high. Firstly, the trading volume for spot business is small. For example, buyers usually book only five or ten tons at a time; secondly, dealers endure higher costs on stocking. Our price is almost at the same level as the mainstream price.
Asian Metal: Russia was hit by high temperature in summer, the likes of which have not been seen in a century. Did the bad weather exert any impacts on the market? And how?
Denis: Some companies chose to work at night to excape the hot weather or work for half-day, but the extreme weather did not last long, so it did not affect much on the market.
Asian Metal: Thank you for taking the time for the interview. Wish prosperity with your business.
Denis: Thanks!
Denis: Our company was established in 2006, engaged in non-ferrous metal trading business. And it is located in Top Radishchevsky, 13 Moscow.
Asian Metal: What metal products are your company mainly engaged in?
Denis: We currently have business related to silicon, magnesium, manganese and bismuth ingot. And we hope to establish a long-term partnership with Chinese producers in coming years.
Asian Metal: Could you introduce to us the current Russian minor metals market?
Denis: Under the influence of the global economic crisis in 2008, some small Russian trading companies have been closed down, and the market slided straight down. While many large producers were just striving to maintain tiny output. Anyway, the market will generally not take a down-trend this year. Russian consumption of minor metals has been lagging behind in recent years. For instance, the annual demands for silicon, magnesium and bismuth are about 50,000 tons, 13,000 tons and 15 tons respectively. The gradual recovery of demand this year may propel the market forward.We are cautiously optimistic about the market in the fourth quarter.
Asian Metal: Commenting on magnesium, it is known that there are two big magnesium producers in Russia , but a large quantity of magnesium ingot is still imported from China . Do you think that magnesium ingot from China enjoys the price advantage? And how do you think the current Russian magnesium ingot market?
Denis: We tried to establish a partnership with Avisma in 2007, but because we purchase in small quantitiest, and the two large Russian magnesium producers tend to sell in long-term contracts, it is difficult to make direct purchase from them. In Russian spot market, the exchanging volume in a single trading is usually 20-40 tons. After the market got recovered gradually in the fourth quarter of 2009, supply and demand improved as well, and magnesium price began to rise slightly. The spot price for magnesium ingot in Russia increased from RUB105-110/kg in the fourth quarter of 2009 to RUB120-125/kg in the second quarter of 2010 and up further to RUB140-145/kg at the beginning of the third quarter. The third quarter follows the up-trend and the price holds firm until now. As to magnesium ingot with Chinese origin, we need to pay 15% import duty on the product, and 18% value added tax after that. Nevertheless, the price of magnesium ingot imported from China still has some advantages in the Russian spot market, so many traders prefer to import from China . For instance, we bought 20t of magnesium ingot at USD2,700/t FOB China in the middle of August with a shipment of 45 days. The transportation cost is USD114/t. Plus 15% import duty and 18% VAT, our purchasing cost is USD3,710/t or RUB115/kg delivered to the warehouse, so the price is still lower than that of magnesium ingot from Russian producers.
Asian Metal: What are the magnesium consuming industries in Rusia? How about the supply in the spot market?
Denis: Desulfurizing in steel making, titanium and aluminum alloy are the three major consuming sectors for magnesium in Russia. Crude steel output in Russia experienced a 12.6% decline YOY from 68,500,000 tons to 59,900,000 tons. H1 output of crude steel totaled 26,600,000 tons, 30.4% down compared to the same period of 2008. It’s therefore not difficult to see that the construction and manufacturing industries have not yet recovered. The instability of crude steel demand will inevitably bring in great uncertainty in the performance of magnesium powder which is used as desulferizer in steel making. Besides, titanium production in CIS also fell dramatically after the economic crisis. For instance, the annual production capacities of titanium in Russia, Ukraine and Kazakhstan came to 30,000 tons, 9,000 tons and 20,000 tons respectively before the economic crisis, all ranking within the world top six producers, but the great fall-down in output after the crisis exerts negative influence on magnesium consumption. I think the magnesium supply in the spot market generally keeps stable, and that’s why the price has remained at RUB140-145/kg during the past two months.
Asian Metal: Is the supply of magnesium in Russian metal stable this year? How does the economic crisis affect Russian magnesium market?
Denis: The supply is largely stable, but the import volume has remained low since the economic crisis.
Asian Metal: What kinds of products except magnesium ingot and manganese lump does your company import from China? How do you fix the price? It there a pricing formula?
Denis: We’re planning to import some silicon metal and bismuth ingot from China. We fix the price according to Asian Metal’pricing system.
Asian Metal: We learnt that many dealers quote a relatively high price for magnesium ingot as well as other metals in Russian spot market. How do you think it? Please explain to us why the price is comparatively high based on your own pricing style.
Denis: Usually we do not hold inventories but only make purchases after receiving orders. There are two reasons that why the spot price in Russian market keeps high. Firstly, the trading volume for spot business is small. For example, buyers usually book only five or ten tons at a time; secondly, dealers endure higher costs on stocking. Our price is almost at the same level as the mainstream price.
Asian Metal: Russia was hit by high temperature in summer, the likes of which have not been seen in a century. Did the bad weather exert any impacts on the market? And how?
Denis: Some companies chose to work at night to excape the hot weather or work for half-day, but the extreme weather did not last long, so it did not affect much on the market.
Asian Metal: Thank you for taking the time for the interview. Wish prosperity with your business.
Denis: Thanks!