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.Li Runlin, the Chief for Section of Materials Department & Purchase Department in Shanxi Taigang Stainless Steel Co.,Ltd.
Taiyuan Iron & Steel (Group) Co., Ltd. (TISCO) is located in Taiyuan, the capital city of Shanxi Province, which ranks the front row in mineral resource reserves, including coal, iron, bauxite, gallium, etc. and is an important industrial base of energy and raw materials in China. Taiyuan neighbors Beijing and Tianjin and is located within the Bohai Economic Circle as well as Beijing and Tianjin Urban Economic Circle, enjoying the advantages of rich resources, energy and transportation.
Li Runlin: No great influence on stainless and chrome markets by energy conservation and pollutant emission reduction in the long-term perspective
----Interview with Mr.Li Runlin, the Chief for Section of Materials Department & Purchase Department in Shanxi Taigang Stainless Steel Co.,Ltd.
Asian Metal: At present China imposes some kinds of regulation and control on the real estate industry. Meanwhile, the policies of energy reduction, pollutant emission reduction and elimination of obsolete capacities will affect Chinese stainless steel production and price more or less. Is there any negative effect on your company?
Mr.Li: Those polities certainly impact steel and chrome markets. From my view, the control of real estate industry is due to the big bubble in it and the main reason is from huge financial inflation. The first thing to regulate real estate industry is to reduce the risk inflationary pressure and the second one is raising interest rate to solve this problem. Beside, China should implement a series of policies to control it. The current operating rate in steel industry is less than 70%. Meanwhile, chrome industry's production also decreases to some extent. China's energy reduction conservation and polluted emission reduction affects the market in the short term, but I think there is no great impact towards the market in the long term, as the relation between supply and demand determines chrome market trend. In a word, the implement of energy conservation and polluted emission reduction has no great influence on the market in the long run.
Asian Metal: What should be the development direction and concept for the future steel mills?
Mr.Li: The first one is merger and reorganization; the second one is the synergy of complementarities; the third one is the extension and deepening of industry linkage in steel products and the fourth one is the long-term regulation of production structure. Easier said than done though it is encouraging that some domestic steel mills work hard to carry out the above principles, such as, Hebei Iron & Steel Group, Shandong Iron & Steel Group, Baosteel, Anshan Iron & Steel Group Corporation, Wuhan Iron & Steel Group Corporation and so on. Not only are they becoming stronger and bigger in domestic market but also it is good for their export business by means of technical, equipment, geographical, raw materials, and market advantages and so on.
As for the extension of industry linkage, many participants are aware that the raw materials of iron ore fines, coal, nickel and chrome and so on are soaring, which push up the price increase in steel products and makes producers of nickel, chrome and steel products confused. I think we should do our best effort to pay attention to raw materials with low price levels and steady resources. As for the downstream industry linkage, we should do deep-processing steel products to lift our ability of competition.
Asian Metal: Chinese steel mills still rely on imported ferrochrome deeply. Would you mind telling us the percentage and trend of imported ferrochrome volume? Could you discuss about the future demand for imported ferrochrome?
Mr.Li: Many participants pay much attention to this question. Our monthly consumption of ferrochrome is more than 50,000t and the annual consumption reaches to 600,000t. The percentage of imported ferrochrome affects domestic prices somewhat. Many asked me whether we imported ferrochrome or not and the volume. We have three origins purchasing ferrochrome. The first one is domestic ferrochrome; the second one is ferrochrome imported from Kazakhstan and the third is from Indian, South Africa and so on. In the first half of this year, our volume of imported ferrochrome shares 60% in our total ferrochrome consumption due to cheaper prices, but in the second half year the higher prices of imported ferrochrome scare us away. The percentage of our annual ferrochrome imported ferrochrome is in the range of 30-60%. From the supply between imported and domestic ferrochrome, the percentage of imported ferrochrome should be steady. Meanwhile, due to the energy conservation, pollutant emission reduction and continual increase in power price, the production cost of ferrochrome in China become much higher than imported ferrochrome, so we should import ferrochrome under this situation. It is a guarantee of suitable ferrochrome prices we purchased.
Asian Metal: Chinese ferrochrome smelters face scattering management and deeply dependence for imported raw materials. Any good advises for those smelters?
Mr.Li: The problem is significant but hard to solve. I think everyone should unit together to improve the negotiation ability, which is a best way to reduce the purchasing cost of raw materials. Besides, we should acquire resources through holding or engaging shares, for example, JISCO, Sinosteel, Minmetals, TISCO and so on. To unite together to get resources requires everyone to open the warm arms. China lacks of chrome ore resources, which is abundant in South Africa, Kazakhstan and India and so on.
Asian Metal: As a matter of fact to all in the industry, TISCO enlarges its chrome ore investment in order control upstream cost. Is there any new project for launch? Is there any advice to share with stakeholders in the industry?
Mr.Li: We are working hard in the extension of upstream and downstream industry linkage. We cooperate with CVK, from which we could get hundreds of thousands of chrome ore per year, which strengthens our ability in chrome ore purchase and bargaining. We also work on nickel products, which is more risky and perhaps profitable than chrome ore. We could get considerable nickel products by investing a project in Burma, which is to begin operation next year, which could reduce our costs greatly. We have our own iron ore nearby Shanxi. Meanwhile, an iron ore is to be established and the supply volume will be large and if it is put into operation completely, as it could contribute in cutting down our purchasing cost by 50%.
We have some other projects in ferrochrome-processing industry. We welcome to cooperate with those customers who have their own mines or also ability of processing to extend our industry linkage and develop together.
Asian Metal: Please tell us something about Taigang Group Int'l Trade Co.,Ltd.
Mr.Li: I introduce a new friend to all of you, that is, Taigang Group Int'l Trade Co.,Ltd. The company is mainly in charge of the sales of chrome ore, which we cooperate with CVK and supplies to us about hundreds of thousands of the material. Taigang Group Int'l Trade Co.,Ltd, which is the subsidiary of TISCO, established in 1986 and has five subsidiaries in Hongkong China, America, Europe, Russia and South Africa. As the international window of Group Corporation, Taigang Group Int'l Trade Co.,Ltd carries out international strategic brand with the responsibility of I/E of equipments, accessories, technique and so on and cooperation by credit, maintenance, equal and encouragement. In 2006 the company's net I/E sum reached to USD1.86 million, taking up 21.8% in the total export sum in Shanxi and ranking 47 in the top 200 of import companies. In 2009, as the largest overseas investment project and even the largest one in Turkish local area, the cooperative project invested more than USD200 million in TISCO with CVK Group run into operation. The total reservation of chrome ore could be 55 million tons for the joint project and the volume would reach1.6 million tons in 2014. Taigang Group Int'l Trade Co.,Ltd is responsible for the chrome ore sales and management and would like to cooperate with all of you.
Mr.Li: Those polities certainly impact steel and chrome markets. From my view, the control of real estate industry is due to the big bubble in it and the main reason is from huge financial inflation. The first thing to regulate real estate industry is to reduce the risk inflationary pressure and the second one is raising interest rate to solve this problem. Beside, China should implement a series of policies to control it. The current operating rate in steel industry is less than 70%. Meanwhile, chrome industry's production also decreases to some extent. China's energy reduction conservation and polluted emission reduction affects the market in the short term, but I think there is no great impact towards the market in the long term, as the relation between supply and demand determines chrome market trend. In a word, the implement of energy conservation and polluted emission reduction has no great influence on the market in the long run.
Asian Metal: What should be the development direction and concept for the future steel mills?
Mr.Li: The first one is merger and reorganization; the second one is the synergy of complementarities; the third one is the extension and deepening of industry linkage in steel products and the fourth one is the long-term regulation of production structure. Easier said than done though it is encouraging that some domestic steel mills work hard to carry out the above principles, such as, Hebei Iron & Steel Group, Shandong Iron & Steel Group, Baosteel, Anshan Iron & Steel Group Corporation, Wuhan Iron & Steel Group Corporation and so on. Not only are they becoming stronger and bigger in domestic market but also it is good for their export business by means of technical, equipment, geographical, raw materials, and market advantages and so on.
As for the extension of industry linkage, many participants are aware that the raw materials of iron ore fines, coal, nickel and chrome and so on are soaring, which push up the price increase in steel products and makes producers of nickel, chrome and steel products confused. I think we should do our best effort to pay attention to raw materials with low price levels and steady resources. As for the downstream industry linkage, we should do deep-processing steel products to lift our ability of competition.
Asian Metal: Chinese steel mills still rely on imported ferrochrome deeply. Would you mind telling us the percentage and trend of imported ferrochrome volume? Could you discuss about the future demand for imported ferrochrome?
Mr.Li: Many participants pay much attention to this question. Our monthly consumption of ferrochrome is more than 50,000t and the annual consumption reaches to 600,000t. The percentage of imported ferrochrome affects domestic prices somewhat. Many asked me whether we imported ferrochrome or not and the volume. We have three origins purchasing ferrochrome. The first one is domestic ferrochrome; the second one is ferrochrome imported from Kazakhstan and the third is from Indian, South Africa and so on. In the first half of this year, our volume of imported ferrochrome shares 60% in our total ferrochrome consumption due to cheaper prices, but in the second half year the higher prices of imported ferrochrome scare us away. The percentage of our annual ferrochrome imported ferrochrome is in the range of 30-60%. From the supply between imported and domestic ferrochrome, the percentage of imported ferrochrome should be steady. Meanwhile, due to the energy conservation, pollutant emission reduction and continual increase in power price, the production cost of ferrochrome in China become much higher than imported ferrochrome, so we should import ferrochrome under this situation. It is a guarantee of suitable ferrochrome prices we purchased.
Asian Metal: Chinese ferrochrome smelters face scattering management and deeply dependence for imported raw materials. Any good advises for those smelters?
Mr.Li: The problem is significant but hard to solve. I think everyone should unit together to improve the negotiation ability, which is a best way to reduce the purchasing cost of raw materials. Besides, we should acquire resources through holding or engaging shares, for example, JISCO, Sinosteel, Minmetals, TISCO and so on. To unite together to get resources requires everyone to open the warm arms. China lacks of chrome ore resources, which is abundant in South Africa, Kazakhstan and India and so on.
Asian Metal: As a matter of fact to all in the industry, TISCO enlarges its chrome ore investment in order control upstream cost. Is there any new project for launch? Is there any advice to share with stakeholders in the industry?
Mr.Li: We are working hard in the extension of upstream and downstream industry linkage. We cooperate with CVK, from which we could get hundreds of thousands of chrome ore per year, which strengthens our ability in chrome ore purchase and bargaining. We also work on nickel products, which is more risky and perhaps profitable than chrome ore. We could get considerable nickel products by investing a project in Burma, which is to begin operation next year, which could reduce our costs greatly. We have our own iron ore nearby Shanxi. Meanwhile, an iron ore is to be established and the supply volume will be large and if it is put into operation completely, as it could contribute in cutting down our purchasing cost by 50%.
We have some other projects in ferrochrome-processing industry. We welcome to cooperate with those customers who have their own mines or also ability of processing to extend our industry linkage and develop together.
Asian Metal: Please tell us something about Taigang Group Int'l Trade Co.,Ltd.
Mr.Li: I introduce a new friend to all of you, that is, Taigang Group Int'l Trade Co.,Ltd. The company is mainly in charge of the sales of chrome ore, which we cooperate with CVK and supplies to us about hundreds of thousands of the material. Taigang Group Int'l Trade Co.,Ltd, which is the subsidiary of TISCO, established in 1986 and has five subsidiaries in Hongkong China, America, Europe, Russia and South Africa. As the international window of Group Corporation, Taigang Group Int'l Trade Co.,Ltd carries out international strategic brand with the responsibility of I/E of equipments, accessories, technique and so on and cooperation by credit, maintenance, equal and encouragement. In 2006 the company's net I/E sum reached to USD1.86 million, taking up 21.8% in the total export sum in Shanxi and ranking 47 in the top 200 of import companies. In 2009, as the largest overseas investment project and even the largest one in Turkish local area, the cooperative project invested more than USD200 million in TISCO with CVK Group run into operation. The total reservation of chrome ore could be 55 million tons for the joint project and the volume would reach1.6 million tons in 2014. Taigang Group Int'l Trade Co.,Ltd is responsible for the chrome ore sales and management and would like to cooperate with all of you.