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. Sun Jianliang, the managing director of Shanghai J.Sun Trading Consultants Ltd. (J.SUN)
Chartered and established in Shanghai, China in January 1999, Shanghai J.Sun Trading Consultants Ltd.(J.SUN) is a professional company with sound reputation, richly specializing in trading consultancy. J.SUN act as an independent service provider for Sourcing, Marketing & Investment related to China market for manufacturers and end users, etc. at home and abroad. With better value added service at comparatively lower cost, J.SUN have successfully targeted and will continue to make every endeavor to target reliable clients for qualified commodities/suitable projects at better prices/reasonable investments for our customers.
Chrome market will become better in the second quarter of 2010
----Interview with Mr. Sun Jianliang, the managing director of Shanghai J.Sun Trading Consultants Ltd. (J.SUN)
Asian Metal: Thanks for accepting our interview. Please, what is your take of the current and future economic trend in China?
Sun: Following the financial crisis, the Chinese macro-economy trend mainly depends on the stimulus or guidance carried out by Chinese government. The stimulus or guidance takes an important role in all kinds of Chinese industries, for example, steel industry and also it includes stainless steel industry. Although many participants are pessimistic towards the market, Chinese stainless steel industry in 2009 operated smoothly from April to August and many steel mills are now running with their full production capacity. I think the Chinese economic policy in 2010 will follow up 2009's and the whole economy will be influenced by the government's adjustment. Although International steel or stainless steel market suffers a lot of impacts, China maintains its independent development space. According to the current data, Chinese economic situation is better than others.
Asian Metal: How do you explain the current supply and demand situation? As we know, Chinese ferrochrome market keeps increasing due to the high production cost, but the purchasing prices from consumers are not as optimistic as participants expected, so many ferrochrome smelters have had to cut back or suspend their production.
Sun: After the financial crisis, the current market situation is different from last year. Before the financial crisis, many producers with their total production capacity were confident towards the future market and the new projects were going on. However, due to the financial crisis, many participants were panic and had no other choice but to liquidate their stocks quickly, so the price of ferrochrome and chrome ore went down in a precipitous manner. In 2009, the situation was a little bit better, however. Although many stainless steel mills are pressing down ferrochrome prices, ferrochrome market keeps increasing due to high production costs or else those producers will suspend their production. I think many stainless steel mills have to accept the increased ferrochrome prices in order to maintain their normal consumption volume.
Asian Metal: Do you believe the consumption volume from steel mills has decreased greatly?
Sun: I think there is nearly no change in the market. Although many large stainless steel mills decreased by about 20-30%, due to the increased production capacity of stainless steel products in recent years, the purchasing quantity for ferrochrome remains at a high level. Besides, once ferrochrome market witnesses a price increase, many buyers will enter into the market to purchase quickly.
Asian Metal: In the first quarter of 2009, imported ferrochrome flowed into Chinese market in a large volume due to the low price level; so Chinese ferrochrome market went down quickly. Do you believe that the same situation will emerge in the first quarter of this year? Whether International ferrochrome market has recovered already?
Sun: The current market situation is very different from the year of 2009. Facing the financial crisis, many participants could not figure out what the bottom lines were, so they were constrained and had to reduce their large quantities of stocks on hand due to sluggish demand and the price drops sharply. Due to the powerful support from Chinese government, the operating rate in Chinese stainless steel mills becomes better, but as for other countries, the operating rate is less than 80%. Due to the continuous consumption of stocks and less supply than the previous year, there is nearly no sign for those participants to liquidate their stocks. Now the supply of Indian ferrochrome is not sufficient and the South African-origin charge chrome ore keeps going up, so I think it is impossible for Chinese buyers to import ferrochrome as largely as early 2009.
In Europe, I think the operating rate is about 70% and 80-90% in Japan and South Korea. Meanwhile, those consumers are not optimistic towards the market in the first quarter and it is even satisfactory for them to maintain the current output. Considering the demand from downstream consumers, it is hard for ferrochrome market to go up. However, due to the exchange rate between USD and Rand and increasing electricity price in South Africa, there is almost no possibility for the market to drop. Of course, it still depends on Chinese market trend, as Chinese economy plays an important role in world economic recovery.
Asian Metal: In recent years, many countries pay more attention to natural resources and adopt many policies to restrict export volume. It is said in 2010 South Africa might impose the export duty of USD100/t, so the price of Chinese ferrochrome could likely rise. What measures should China take to strengthen her leverage in setting its chrome ore market pricing?
Sun: The rumor on new export duty imposition in South Africa has been milling around in the market for many years, but I think it is impossible for the policy to be carried out. After the financial crisis, as many countries have to consider developing their economy. South Africa is the largest ferrochrome and chrome ore export country. Many major companies hold both ferrochrome and chrome ore production, so they can adjust the export proportion according to the government's policy, but those small companies prefer to sell chrome ore directly due to quick capital turnover, so once government carried out the export duty imposition, small companies have to leave the market. We can take Indian chrome ore market as an example. Due to the sluggish economic environment, the price of Indian chrome ore drops to about USD250-260/t FOB from above USD700/t FOB, so it shows they welcome to export chrome ore to bring more benefits for the country. I think it still needs time for South Africa to impose export duty of chrome ore.
Asian Metal: Any experience or suggestion you can share with Chinese producers for market risks reduction?
Sun: I think the main important factor is how to get access to enough natural resources. China has to import chrome ore from other countries due to lack of the natural resource, so once foreign suppliers increase their offers, Chinese ferrochrome producers have no other choice but to accept high prices passively. I think Chinese producers should come together and have a single negotiating team against producers to set prices of chrome ore to get more price advantages, as China is the largest chrome ore import country in the world. Participants can refer to the model set by CVK, Shanxi Wanbang and Shanxi Taigang Steel, and the cooperative model should also be diverse.
Asian Metal: Ferrochrome industry is still a high-energy consumption and severe-pollution one in China, so what do you think technical renovation and industry promotion?
Sun: China has a strict restriction for high-energy consumption and severe pollution ferroalloys industry. I think we can draw lessons from Japan and South Korea, which have nearly no ferroalloys industry in domestic market but they can get enough materials at suitable prices. Chinese participants should consider establishing plants in other countries to control production cost and reduce energy consumption and pollution. However, you need to balance the trade-offs that stimulates local economic development.
Asian Metal: What do you think the future chrome and stainless steel markets?
Sun: I think the market should still be under the control of government's guidance and adjustment. At present the market seems to be active due to the replenishment from consumers before the Spring Festival, but I believe it is difficult for the market to recover in the first quarter of 2010 but the market is likely to warm up in the second quarter.
Asian Metal: Please tell us more about your company.
Sun: Shanghai J.Sun Trading Consultants Ltd.(J.SUN) is a professional company with sound reputation, richly specializing in trading consultancy. J.SUN act as an independent service provider for Sourcing, Marketing & Investment related to Chinese market for manufacturers and end-users, etc. at home and abroad. J.SUN has successfully targeted and will continue to make every endeavor to target reliable clients for qualified commodities/suitable projects at better prices/reasonable investments for our customers.
Asian Metal: Hope your company will develop better and better.
Sun: Thanks! Hope Asian Metal a brighter future.
Asian Metal: Thank you for accepting our interview.
Sun: Following the financial crisis, the Chinese macro-economy trend mainly depends on the stimulus or guidance carried out by Chinese government. The stimulus or guidance takes an important role in all kinds of Chinese industries, for example, steel industry and also it includes stainless steel industry. Although many participants are pessimistic towards the market, Chinese stainless steel industry in 2009 operated smoothly from April to August and many steel mills are now running with their full production capacity. I think the Chinese economic policy in 2010 will follow up 2009's and the whole economy will be influenced by the government's adjustment. Although International steel or stainless steel market suffers a lot of impacts, China maintains its independent development space. According to the current data, Chinese economic situation is better than others.
Asian Metal: How do you explain the current supply and demand situation? As we know, Chinese ferrochrome market keeps increasing due to the high production cost, but the purchasing prices from consumers are not as optimistic as participants expected, so many ferrochrome smelters have had to cut back or suspend their production.
Sun: After the financial crisis, the current market situation is different from last year. Before the financial crisis, many producers with their total production capacity were confident towards the future market and the new projects were going on. However, due to the financial crisis, many participants were panic and had no other choice but to liquidate their stocks quickly, so the price of ferrochrome and chrome ore went down in a precipitous manner. In 2009, the situation was a little bit better, however. Although many stainless steel mills are pressing down ferrochrome prices, ferrochrome market keeps increasing due to high production costs or else those producers will suspend their production. I think many stainless steel mills have to accept the increased ferrochrome prices in order to maintain their normal consumption volume.
Asian Metal: Do you believe the consumption volume from steel mills has decreased greatly?
Sun: I think there is nearly no change in the market. Although many large stainless steel mills decreased by about 20-30%, due to the increased production capacity of stainless steel products in recent years, the purchasing quantity for ferrochrome remains at a high level. Besides, once ferrochrome market witnesses a price increase, many buyers will enter into the market to purchase quickly.
Asian Metal: In the first quarter of 2009, imported ferrochrome flowed into Chinese market in a large volume due to the low price level; so Chinese ferrochrome market went down quickly. Do you believe that the same situation will emerge in the first quarter of this year? Whether International ferrochrome market has recovered already?
Sun: The current market situation is very different from the year of 2009. Facing the financial crisis, many participants could not figure out what the bottom lines were, so they were constrained and had to reduce their large quantities of stocks on hand due to sluggish demand and the price drops sharply. Due to the powerful support from Chinese government, the operating rate in Chinese stainless steel mills becomes better, but as for other countries, the operating rate is less than 80%. Due to the continuous consumption of stocks and less supply than the previous year, there is nearly no sign for those participants to liquidate their stocks. Now the supply of Indian ferrochrome is not sufficient and the South African-origin charge chrome ore keeps going up, so I think it is impossible for Chinese buyers to import ferrochrome as largely as early 2009.
In Europe, I think the operating rate is about 70% and 80-90% in Japan and South Korea. Meanwhile, those consumers are not optimistic towards the market in the first quarter and it is even satisfactory for them to maintain the current output. Considering the demand from downstream consumers, it is hard for ferrochrome market to go up. However, due to the exchange rate between USD and Rand and increasing electricity price in South Africa, there is almost no possibility for the market to drop. Of course, it still depends on Chinese market trend, as Chinese economy plays an important role in world economic recovery.
Asian Metal: In recent years, many countries pay more attention to natural resources and adopt many policies to restrict export volume. It is said in 2010 South Africa might impose the export duty of USD100/t, so the price of Chinese ferrochrome could likely rise. What measures should China take to strengthen her leverage in setting its chrome ore market pricing?
Sun: The rumor on new export duty imposition in South Africa has been milling around in the market for many years, but I think it is impossible for the policy to be carried out. After the financial crisis, as many countries have to consider developing their economy. South Africa is the largest ferrochrome and chrome ore export country. Many major companies hold both ferrochrome and chrome ore production, so they can adjust the export proportion according to the government's policy, but those small companies prefer to sell chrome ore directly due to quick capital turnover, so once government carried out the export duty imposition, small companies have to leave the market. We can take Indian chrome ore market as an example. Due to the sluggish economic environment, the price of Indian chrome ore drops to about USD250-260/t FOB from above USD700/t FOB, so it shows they welcome to export chrome ore to bring more benefits for the country. I think it still needs time for South Africa to impose export duty of chrome ore.
Asian Metal: Any experience or suggestion you can share with Chinese producers for market risks reduction?
Sun: I think the main important factor is how to get access to enough natural resources. China has to import chrome ore from other countries due to lack of the natural resource, so once foreign suppliers increase their offers, Chinese ferrochrome producers have no other choice but to accept high prices passively. I think Chinese producers should come together and have a single negotiating team against producers to set prices of chrome ore to get more price advantages, as China is the largest chrome ore import country in the world. Participants can refer to the model set by CVK, Shanxi Wanbang and Shanxi Taigang Steel, and the cooperative model should also be diverse.
Asian Metal: Ferrochrome industry is still a high-energy consumption and severe-pollution one in China, so what do you think technical renovation and industry promotion?
Sun: China has a strict restriction for high-energy consumption and severe pollution ferroalloys industry. I think we can draw lessons from Japan and South Korea, which have nearly no ferroalloys industry in domestic market but they can get enough materials at suitable prices. Chinese participants should consider establishing plants in other countries to control production cost and reduce energy consumption and pollution. However, you need to balance the trade-offs that stimulates local economic development.
Asian Metal: What do you think the future chrome and stainless steel markets?
Sun: I think the market should still be under the control of government's guidance and adjustment. At present the market seems to be active due to the replenishment from consumers before the Spring Festival, but I believe it is difficult for the market to recover in the first quarter of 2010 but the market is likely to warm up in the second quarter.
Asian Metal: Please tell us more about your company.
Sun: Shanghai J.Sun Trading Consultants Ltd.(J.SUN) is a professional company with sound reputation, richly specializing in trading consultancy. J.SUN act as an independent service provider for Sourcing, Marketing & Investment related to Chinese market for manufacturers and end-users, etc. at home and abroad. J.SUN has successfully targeted and will continue to make every endeavor to target reliable clients for qualified commodities/suitable projects at better prices/reasonable investments for our customers.
Asian Metal: Hope your company will develop better and better.
Sun: Thanks! Hope Asian Metal a brighter future.
Asian Metal: Thank you for accepting our interview.