Wang Huaqing: We are committed to improve quality of products

Asian Metal: Good day, Mr. Wang. Thank you for accepting this interview. Please introduce the condition of your company. How is your company's production situation at the moment?

Wang: Yangzhou Liuzhou Zinc Products Co., Ltd, was founded in November 2000. The company is a professional producer of zinc oxide. We have two indirect production lines with production capacity of 6,000tpy. Moreover, we also have two direct production lines with production capacity of 4,000tpy. We halted zinc oxide 90-99% production as the demand was very weak and the environmental pollution was serious, so we only produced zinc oxide 99.7% in the recent years.

Asian Metal: Zinc price keeps at a low level this year. Would you like to talk about the trend of zinc ingot price in the following months?

Wang: The price of zinc ingot fluctuates at a low level this year, and zinc oxide producers mingled hope and fear. The upside is that the raw material price fluctuates at a low level narrowly, which lowered the market risk of zinc oxide enterprises. However, the downside is that low price suppresses purchase enthusiasm from downstream consumers.

Asian Metal: The supply exceeded demand in Chinese domestic zinc oxide market in the past years. What prediction do you have for the future zinc oxide market?

Wang: The economy of home and abroad is unfavorable, so zinc oxide demand decreased this year compared with that in favorable economy period. In addition, zinc oxide capacity increased disorderly in the past years, so it was hard to change situation of oversupply which will exist for a long term.

Asian Metal: Tire enterprises showed no longer strong since last year, the tire industry in China will face pressure in the following days. How do you see future development of zinc oxide market?

Wang: Due to sluggish world economy, zinc oxide demand decreased. Actually the tire industry was hit slightly, and the hit in tire and rubber industry was relatively smaller than those other industries. However, zinc oxide industry are facing processing charges increasing, labor shortage, lowering price from consumers, and producers obtained profit which is getting more and more limited, so zinc oxide enterprises are in difficult condition and the living space is narrow.

Asian Metal: Your company mainly produces zinc oxide from zinc ingot, but there are above 80% of zinc oxide plants which produce zinc oxide from zinc scrap, and the market of zinc oxide produced from zinc ingot was hit heavily as the price of zinc oxide produced from zinc scrap is low. How to plan for the company's future development, and whether you have plan to increase zinc oxide produced from zinc scrap production lines?

Wang: Zinc oxide produced from zinc scrap was mainly used in rubber and tire industry, and the quality is the same as direct zinc oxide 99.5%. Some consumers would like to purchase lower price of zinc oxide, so it is surely hard for us to sell zinc oxide produced from zinc ingot as the price is high. Our company mainly concentrates on improving the interior quality of the products these years, meeting different downstream users’ demand, As different industries, different users need different products, which are different in the physical and chemical properties. We developed zinc oxide to meet different industries and different customers and adapted to the market demand, and we mainly sell material to high-end consumers, meanwhile we improve the market competitiveness. About extending zinc oxide produced from zinc scrap production lines, we have no plan currently, as the zinc oxide industry is not so easy as we imagine.

Asian Metal: There are a few of enterprises expanding or building additional production capacities this year. What do you think about expanding production? Do you think zinc oxide industry still has strong development potential?

Wang: The enterprises must see exactly what advantage they have. If they take it for granted that they expand production to squeeze a colleague's idea, it would be suicide. The zinc oxide producers faced processing costs rising, recruitment difficulties, financing costs increasing and depressing prices from consumers currently, so it was unprofitable for enterprises product to expand production blindly.

The low entrance standard and exceeding demand is a common problem in zinc oxide industry, so we need improve the quality of products, control foreign high-end market, improve level of tooling, save energy and reduce consumption, and we will have the best development potential.

Asian Metal: Facing the increasing fierce competition in zinc oxide market, do you have any advice to activate companies in the industry?

Wang: The national standards and industry standards of products are extensive in Chinese, and one standard is applied in dozens of industries, so the actual operation is difficult. I suggested that some enterprises with strength and ability can refer to foreign relevant standards together, and combine the demand of downstream users to refined zinc oxide standard, and make the production of various grades of zinc oxide to meet different users. In addition, l thought we should send up industry association. We can keep communication and cooperation and avoid vicious competition. Meanwhile, we should improve discursive power of production enterprises, and maintain the reasonable profit space of the industry. If there is no reasonable profit space, enterprises are difficult to survive.

With the development of the economy, tax regulation is more and more perfect, and environmental regulation is more and more strict. In addition, some small-sized plants will be eliminated.

Asian Metal: Thank you for sharing your opinion with our readers and industry players.

Wang: Thanks! We appreciate supports from Asian Metal.