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 Hu Jinglin, vice general manager of Sichuan Leshan Xinhe Electric Power Comprehensive Opening Co., Ltd.
Sichuan Leshan Xinhe Electric Power Comprehensive Opening Co., Ltd., located near Dadu River which is between the Giant Stone Buddha at Leshan Mountain and Xichang Cosmodrome of Aerospace Ministry, is an integrated enterprise of hydroelectric development, ferroalloy production and hotel & tourism service. The company has obvious advantages in transportation as it is nearby Chengdu-Kunming railway, and 230 kilometers far away from Chengdu Shuangliu International Airport. The company has two hydropower stations of 2×11,000KW and 2×1,600KW which produce 133.56 million KW of electric power every year, as well as two submerged arc furnaces of 16,500KVA and three furnaces of 12,500KVA. Annual capacity of ferrochrome can be over 100,000t.
Hu Jinglin: Chinese ferrochrome capacity expansion worth worrying
----Interview with Hu Jinglin, vice general manager of Sichuan Leshan Xinhe Electric Power Comprehensive Opening Co., Ltd.
Asian Metal: Mr. Hu, what do you think of global economy and domestic economy?
Mr. Hu: In general, the economy is not so good. As to overseas market, demand for high carbon (HC) ferrochrome in Europe and US has no sign to improve due to the sluggish economy. Decreasing demand of ferrochrome in those markets might force South African ferrochrome producers lower their offers and shift their focus to exporting more materials to the China, bringing great pressure to the Chinese market. The situation in China is also not optimistic. Government’s economic policy is uncertain as experts are divided on the issue but the policy is likely to keep stable with slight adjustments in investment scale. Considering the current domestic financial market and economic policy, the market is likely to keep at a low level.
Asian Metal: What does Xinhe focus on? How is the current production situation going on?
Mr. Hu: We focus on iron ore, lead ore and zinc ore exploitation, power generation, ferroalloy smelting and hotel & tourism service. Our company quit the manganese smelting in 2006 due to the raw material storage problem because the company is located in mountainous area, and then specialized on high carbon ferrochrome production. One of our factories, adopting the automatic production technology, advanced in the world, was put into operation last September. We are not running at full capacity with five furnaces under normal operation. Though power supply is generally tight during the dry season, but we can assure enough power as our smelters locate nearby the national power station. The company needs to keep production despite of the high production cost because there are many orders unfinished.
Asian Metal: What problems do you think the chrome market is facing right now?
Mr. Hu: Mines are the main problems in overseas market and capacity expanding and power shortage are headaches in domestic market. Many plants are planning to increase their outputs, which will bring great pressure to the market. High carbon ferrochrome output of China is expected to reach 6 million tons per year in 2015. We can see that the amount of materials produced in China this year first exceeds the import amount, taking 54% of the whole consumption amount. Even if the stainless steel output doubles in 2015, the consumption of high carbon ferrochrome can not reach 6 million. Industrial integration is an efficient solution to the problems but it is hard to carry out as most plants are private in separated areas.
Meanwhile, power shortage is another major problem for the market, especially this year. On the contrary to earlier period, level period does not occur this year and power shortage even occurs twice in wet season. Hence, many plants cannot keep production at full capacity even during the wet season, a phenomenon I met for the first time at least in the past 20 years when I am in the field. Many plants thus are moving to Qinghai and Inner Mongolia due to the low electricity price and convenient transportation.
Asian Metal: Do you have any development plan in a short time?
Mr. Hu: We have three submerged arc furnaces of 12,500KVA and two furnaces of 16,500KVA for HC ferrochrome production. A new refinery of 3,500KVA has finished installation but will not put into production until next year when power supply becomes sufficient. It is still not certain when to expand the production capacity of submerged arc furnace of 12,500KVA, which depends on actual market trend.
Asian Metal: What do you think of the market outlook for next year?
Mr. Hu: Generally speaking, the market is not so satisfactory. China has developed on the basis of investment since 2008 but the government takes stable economic policy to control investment scale, which significantly influences economic development. After communication, most sources noted that demand is likely to keep stable with possibilities to soften in the coming year.
Most participants have sufficient confidence toward the market that they had during economic crisis in 2008. However, ferrochrome plants keep negative as some just consume inventories of chrome ore while the others purchase according to their immediate needs. They hold small quantity of ferrochrome inventories in hand at present and are out of enthusiasm for production.
Asian Metal: What suggestions do you have for healthy development of chrome industry?
Mr. Hu: As a user of chrome ore, I think it is necessary to depress overseas miners who can still obtain profits because most domestic plants are bearing great losses due to the high production cost including environmental protection fee, electricity price and logistics fee. Profits for overseas plants are sure to decrease as domestic plants are struggling. However, foreign mines have strong monopoly. Hence, domestic participants should band together to depress overseas mines efficiently.
Asian Metal: Thank you very much to accept the interview. Mary Sichuan Leshan Xinhe Electric Power Comprehensive Opening Co., Ltd. a bright future.
Mr. Hu: Thank you!
Mr. Hu: In general, the economy is not so good. As to overseas market, demand for high carbon (HC) ferrochrome in Europe and US has no sign to improve due to the sluggish economy. Decreasing demand of ferrochrome in those markets might force South African ferrochrome producers lower their offers and shift their focus to exporting more materials to the China, bringing great pressure to the Chinese market. The situation in China is also not optimistic. Government’s economic policy is uncertain as experts are divided on the issue but the policy is likely to keep stable with slight adjustments in investment scale. Considering the current domestic financial market and economic policy, the market is likely to keep at a low level.
Asian Metal: What does Xinhe focus on? How is the current production situation going on?
Mr. Hu: We focus on iron ore, lead ore and zinc ore exploitation, power generation, ferroalloy smelting and hotel & tourism service. Our company quit the manganese smelting in 2006 due to the raw material storage problem because the company is located in mountainous area, and then specialized on high carbon ferrochrome production. One of our factories, adopting the automatic production technology, advanced in the world, was put into operation last September. We are not running at full capacity with five furnaces under normal operation. Though power supply is generally tight during the dry season, but we can assure enough power as our smelters locate nearby the national power station. The company needs to keep production despite of the high production cost because there are many orders unfinished.
Asian Metal: What problems do you think the chrome market is facing right now?
Mr. Hu: Mines are the main problems in overseas market and capacity expanding and power shortage are headaches in domestic market. Many plants are planning to increase their outputs, which will bring great pressure to the market. High carbon ferrochrome output of China is expected to reach 6 million tons per year in 2015. We can see that the amount of materials produced in China this year first exceeds the import amount, taking 54% of the whole consumption amount. Even if the stainless steel output doubles in 2015, the consumption of high carbon ferrochrome can not reach 6 million. Industrial integration is an efficient solution to the problems but it is hard to carry out as most plants are private in separated areas.
Meanwhile, power shortage is another major problem for the market, especially this year. On the contrary to earlier period, level period does not occur this year and power shortage even occurs twice in wet season. Hence, many plants cannot keep production at full capacity even during the wet season, a phenomenon I met for the first time at least in the past 20 years when I am in the field. Many plants thus are moving to Qinghai and Inner Mongolia due to the low electricity price and convenient transportation.
Asian Metal: Do you have any development plan in a short time?
Mr. Hu: We have three submerged arc furnaces of 12,500KVA and two furnaces of 16,500KVA for HC ferrochrome production. A new refinery of 3,500KVA has finished installation but will not put into production until next year when power supply becomes sufficient. It is still not certain when to expand the production capacity of submerged arc furnace of 12,500KVA, which depends on actual market trend.
Asian Metal: What do you think of the market outlook for next year?
Mr. Hu: Generally speaking, the market is not so satisfactory. China has developed on the basis of investment since 2008 but the government takes stable economic policy to control investment scale, which significantly influences economic development. After communication, most sources noted that demand is likely to keep stable with possibilities to soften in the coming year.
Most participants have sufficient confidence toward the market that they had during economic crisis in 2008. However, ferrochrome plants keep negative as some just consume inventories of chrome ore while the others purchase according to their immediate needs. They hold small quantity of ferrochrome inventories in hand at present and are out of enthusiasm for production.
Asian Metal: What suggestions do you have for healthy development of chrome industry?
Mr. Hu: As a user of chrome ore, I think it is necessary to depress overseas miners who can still obtain profits because most domestic plants are bearing great losses due to the high production cost including environmental protection fee, electricity price and logistics fee. Profits for overseas plants are sure to decrease as domestic plants are struggling. However, foreign mines have strong monopoly. Hence, domestic participants should band together to depress overseas mines efficiently.
Asian Metal: Thank you very much to accept the interview. Mary Sichuan Leshan Xinhe Electric Power Comprehensive Opening Co., Ltd. a bright future.
Mr. Hu: Thank you!