Ni Wei: Technological innovation and rational production necessary for development direction of blast furnace slag enterprises

Asian Metal: Thank you very much for granting this interview. Firstly, would you like to talk about the future macroeconomic environment?

Ni: According to statistics provided by the State Statistics Bureau in the previous days, economic growth was 7.7% for the first 3 quarters. Investment on infrastructure declines significantly, private investment weakens, yield of banks’ financial products increase and titanium enterprises keep operating rates at a low level, symbolizing that economy remains gloomy. Hence, it is worthy to wait the Third Plenary Session of the 18th Central committee of the Chinese Communist Party at the end of this year. Most participants look forward for effective economic stimulating policies, and I think that new economic policies are sure to be issued and the main problems are reform intensity and depth. However, the plenary session is worthwhile as the Central government is sure to have understood the economic condition at present and will take actions in a short period. European economy appears to be improving as US debt default crisis ends and US economy recovers. Hence, I hold positive attitude toward the long-term economic trend but pessimistic toward the short-term one.

Asian Metal: How about the demand and supply in titanium slag market at present as the market was significantly damaged this year?

Ni: As far as I am concerned, most producers keep operating capacity at a low level and they are reluctant to sell due to losses. Titanium slag producers hold limited inventories but downstream users are unable to find sufficient raw material inventories. In my opinion, Japanese titanium producers have large quantity of raw material.

Asian Metal: Would you like to talk about the operation condition and index at present, as well as new production plan?

Ni: What I can do at present is to decrease output despite its attendant risks of running into losses. It is a difficulty situation that large production capacity means dull shipment or difficult cash withdrawal. Hence, I prefer to maintain production backbones and managers by decreasing production capacity and sales. However, it is may be suitable for investment at present.

Asian Metal: There have been more titanium slag enterprises since H2, 2011. What do you think about the development direction of production capacity adjustment and project expansion?

Ni: Titanium slag production has expanded rapidly since 2011, especially in North China. Strictly speaking, titanium slag producers in Northeast China have the leverage of close proximity to the source of titanium ore. In addition, they are very close to downstream users as there are several large titanium tetrachloride producers in North China. This advantage is only for titanium slag instead of acid slag production. Decreasing inventory and production are sure at present. Traditionally, economic law can take effect in half a year while decreasing capacity needs 2-3 years. However, every producer has to survive on the basis of their own advantages otherwise some will be established. Everyone should think about how to survival.

Asian Metal: The central government has called for technical innovation and product up-grade. What is your opinion or suggestion on this topic?

Ni: Most titanium slag producers use the same smelting except that Xinli Titanium and Panzhihua Titanium use advanced technologies. Hence, it is very hard for producers to reduce power consumption. However, most participants look forward to revolutionary technologies which should keep consistent with the national condition in order to avoid highbrow. We should wait the government to issue stricter environmental protection policies for sulfuric acid titanium dioxide enterprises as sulfuric acid titanium dioxide is the largest market for titanium slag. Only under government-enforced stricter requirements can chloridized titanium dioxide market develops rapidly and acid slag consumption increases, offering supports for titanium dioxide prices to go up and demand for titanium slag improves. I think that producers in North China focus on blast furnace slag while producers on acid slag in South China hold the ace in future.

Asian Metal: What is your opinion on titanium slag trend in Q4?

Ni: I think that the market is likely to keep sluggish before the Spring Festival. Prices will not increase further if real estate market has not improved even though some sulfuric acid titanium dioxide producers have increased their quotations, symbolizing that the real demand is the determinant factor for price trend.

Asian Metal: Thank you very much for sharing blast furnace slag market information and your support for Asian Metal!

Ni: Thank you!