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 Wei Xue, Vice President of Zhongse Dongfang Shaoxing Industrial Co., Ltd.
Wei Xue: Strict aluminum fluoride production cost control necessary to tide over the industry depression
----Interview with Wei Xue, Vice President of Zhongse Dongfang Shaoxing Industrial Co., Ltd.
Asian Metal: Thank you for accepting our interview. As we all know that aluminum fluoride price has kept declining since early this year from RMB9,800/t (USD1,554/t) to current RMB7,000/t (USD1,110/t). What do you think is the most important reason?
Wei: The lowest concluded price, as I have learned, is RMB6,450/t (USD1,023/t) and there is no doubt that the main reason is the overcapacity. Aluminum fluoride capacity increases greatly since the market of 2011 was prosperous. According to our statistics, the total capacity including that on stream and under construction has reached 800,000tpy, while the demand of Chinese domestic market and export market is 500,000tpy，which leads to the serious oversupply. Meanwhile, the main reason why the aluminum ingot capacity releases so slowly is the erratic power supply. Some power plants have voltage but no electric current. Although the aluminum ingot capacity increases in 2012, the growth rate of aluminum fluoride capacity is higher than that of aluminum ingot, so the problem of overcapacity exacerbates.
Asian Metal: Does the price now touch the bottom?
Wei: All the industry suffers great losses based on the current price level. According to the statistics, the current price for fluorspar is RMB1,700/t (USD270/t), RMB350/t (USD55/t) for 98% sulfuric acid and RMB1700/t (USD270/t) for aluminum hydroxide, so the production cost will be around RMB6,700/t (USD1,063/t) including RMB900 (USD143) of fixed costs and equipment depreciation costs. However, considering that some raw materials are original stocks, the production cost will be higher than RMB6,700/t (USD1,063/t). So most manufacturers may lose RMB600-800/t (USD95-127/t) when producing one ton of the material. If some plants operate in poor condition, the loss may reach RMB1,000/t (USD159/t).
Asian Metal：As far as we have learnt, there is still new aluminum fluoride capacity under construction in some regions such as Hunan and Shanxin. How do you think of this situation?
Wei: In addition to Hunan and Shanxi, there is new capacity in other areas. The main reason is that the current policy of fluorine industry is quite contradictory. According to the policies, fluorspar cannot be sold in the form of ore and must undergo deep processing. The production technology of aluminum fluoride is very simple, so many producers choose to produce aluminum fluoride. There are many new fluoride salt industrial parks, using fluorite ore as raw material. Other fluoride products are of high technical threshold and the core technology is owned by foreign countries such as United States, Japan and other foreign enterprises. So many companies in Jiangsu and Zhejiang cooperate with foreign enterprises to take advantage of the advanced technology.
Asian Metal: Will the tight fluorspar supply in winter push up the aluminum fluoride price?
Wei: In general, the fluorspar mining will stop in winter in North China and the government will control explosives. Manufacturers will stock and begin to sell the goods after the Spring Festival. We will increase the fluorspar purchase and stock around 1-2 million tons. Generally, aluminum fluoride price may increase due to tight raw material supply, while it is hard to say this year since we haven’t seen the sign that showing the price may go up. Now most state-owned plants are still running normally since they have production tasks and social responsibility.
Asian Metal: How should the aluminum fluoride enterprises deal with the current situation?
Wei: According to the policies, aluminum fluoride plants with capacity lower than 20,000tpy will be shut down, but the total capacity is not restricted. Therefore, it will take a long time to solve the overcapacity problem. We must take some measures to ensure the normal operation. First of all, we are not eager to sell the products and the stock is around 3,000 tons. Secondly, we must lower the purchase price of raw materials, such as fluorspar, sulfuric acid and aluminum hydroxide. Thirdly, we should reduce other production costs. We must pay close attention to the management under the poor market situation.
Asian Metal: What is the annual production of your company?
Wei: We open two production lines and the plant now is running at full capacity of 60,000tpy.
Asian Metal: Is there any new development strategy of your company?
Wei: Currently, we have no new plan in hydrofluoric acid and aluminum fluoride market. Our group may not have investment in a short time, so we put the steady development in the first place.
Asian Metal: Thanks again for your cooperation. Respectfully wish your corporation progresses day by day.
Wei: Thank you!
----Interview with Wei Xue, Vice President of Zhongse Dongfang Shaoxing Industrial Co., Ltd.
Asian Metal: Thank you for accepting our interview. As we all know that aluminum fluoride price has kept declining since early this year from RMB9,800/t (USD1,554/t) to current RMB7,000/t (USD1,110/t). What do you think is the most important reason?
Wei: The lowest concluded price, as I have learned, is RMB6,450/t (USD1,023/t) and there is no doubt that the main reason is the overcapacity. Aluminum fluoride capacity increases greatly since the market of 2011 was prosperous. According to our statistics, the total capacity including that on stream and under construction has reached 800,000tpy, while the demand of Chinese domestic market and export market is 500,000tpy，which leads to the serious oversupply. Meanwhile, the main reason why the aluminum ingot capacity releases so slowly is the erratic power supply. Some power plants have voltage but no electric current. Although the aluminum ingot capacity increases in 2012, the growth rate of aluminum fluoride capacity is higher than that of aluminum ingot, so the problem of overcapacity exacerbates.
Asian Metal: Does the price now touch the bottom?
Wei: All the industry suffers great losses based on the current price level. According to the statistics, the current price for fluorspar is RMB1,700/t (USD270/t), RMB350/t (USD55/t) for 98% sulfuric acid and RMB1700/t (USD270/t) for aluminum hydroxide, so the production cost will be around RMB6,700/t (USD1,063/t) including RMB900 (USD143) of fixed costs and equipment depreciation costs. However, considering that some raw materials are original stocks, the production cost will be higher than RMB6,700/t (USD1,063/t). So most manufacturers may lose RMB600-800/t (USD95-127/t) when producing one ton of the material. If some plants operate in poor condition, the loss may reach RMB1,000/t (USD159/t).
Asian Metal：As far as we have learnt, there is still new aluminum fluoride capacity under construction in some regions such as Hunan and Shanxin. How do you think of this situation?
Wei: In addition to Hunan and Shanxi, there is new capacity in other areas. The main reason is that the current policy of fluorine industry is quite contradictory. According to the policies, fluorspar cannot be sold in the form of ore and must undergo deep processing. The production technology of aluminum fluoride is very simple, so many producers choose to produce aluminum fluoride. There are many new fluoride salt industrial parks, using fluorite ore as raw material. Other fluoride products are of high technical threshold and the core technology is owned by foreign countries such as United States, Japan and other foreign enterprises. So many companies in Jiangsu and Zhejiang cooperate with foreign enterprises to take advantage of the advanced technology.
Asian Metal: Will the tight fluorspar supply in winter push up the aluminum fluoride price?
Wei: In general, the fluorspar mining will stop in winter in North China and the government will control explosives. Manufacturers will stock and begin to sell the goods after the Spring Festival. We will increase the fluorspar purchase and stock around 1-2 million tons. Generally, aluminum fluoride price may increase due to tight raw material supply, while it is hard to say this year since we haven’t seen the sign that showing the price may go up. Now most state-owned plants are still running normally since they have production tasks and social responsibility.
Asian Metal: How should the aluminum fluoride enterprises deal with the current situation?
Wei: According to the policies, aluminum fluoride plants with capacity lower than 20,000tpy will be shut down, but the total capacity is not restricted. Therefore, it will take a long time to solve the overcapacity problem. We must take some measures to ensure the normal operation. First of all, we are not eager to sell the products and the stock is around 3,000 tons. Secondly, we must lower the purchase price of raw materials, such as fluorspar, sulfuric acid and aluminum hydroxide. Thirdly, we should reduce other production costs. We must pay close attention to the management under the poor market situation.
Asian Metal: What is the annual production of your company?
Wei: We open two production lines and the plant now is running at full capacity of 60,000tpy.
Asian Metal: Is there any new development strategy of your company?
Wei: Currently, we have no new plan in hydrofluoric acid and aluminum fluoride market. Our group may not have investment in a short time, so we put the steady development in the first place.
Asian Metal: Thanks again for your cooperation. Respectfully wish your corporation progresses day by day.
Wei: Thank you!
Wei: The lowest concluded price, as I have learned, is RMB6,450/t (USD1,023/t) and there is no doubt that the main reason is the overcapacity. Aluminum fluoride capacity increases greatly since the market of 2011 was prosperous. According to our statistics, the total capacity including that on stream and under construction has reached 800,000tpy, while the demand of Chinese domestic market and export market is 500,000tpy，which leads to the serious oversupply. Meanwhile, the main reason why the aluminum ingot capacity releases so slowly is the erratic power supply. Some power plants have voltage but no electric current. Although the aluminum ingot capacity increases in 2012, the growth rate of aluminum fluoride capacity is higher than that of aluminum ingot, so the problem of overcapacity exacerbates.
Asian Metal: Does the price now touch the bottom?
Wei: All the industry suffers great losses based on the current price level. According to the statistics, the current price for fluorspar is RMB1,700/t (USD270/t), RMB350/t (USD55/t) for 98% sulfuric acid and RMB1700/t (USD270/t) for aluminum hydroxide, so the production cost will be around RMB6,700/t (USD1,063/t) including RMB900 (USD143) of fixed costs and equipment depreciation costs. However, considering that some raw materials are original stocks, the production cost will be higher than RMB6,700/t (USD1,063/t). So most manufacturers may lose RMB600-800/t (USD95-127/t) when producing one ton of the material. If some plants operate in poor condition, the loss may reach RMB1,000/t (USD159/t).
Asian Metal：As far as we have learnt, there is still new aluminum fluoride capacity under construction in some regions such as Hunan and Shanxin. How do you think of this situation?
Wei: In addition to Hunan and Shanxi, there is new capacity in other areas. The main reason is that the current policy of fluorine industry is quite contradictory. According to the policies, fluorspar cannot be sold in the form of ore and must undergo deep processing. The production technology of aluminum fluoride is very simple, so many producers choose to produce aluminum fluoride. There are many new fluoride salt industrial parks, using fluorite ore as raw material. Other fluoride products are of high technical threshold and the core technology is owned by foreign countries such as United States, Japan and other foreign enterprises. So many companies in Jiangsu and Zhejiang cooperate with foreign enterprises to take advantage of the advanced technology.
Asian Metal: Will the tight fluorspar supply in winter push up the aluminum fluoride price?
Wei: In general, the fluorspar mining will stop in winter in North China and the government will control explosives. Manufacturers will stock and begin to sell the goods after the Spring Festival. We will increase the fluorspar purchase and stock around 1-2 million tons. Generally, aluminum fluoride price may increase due to tight raw material supply, while it is hard to say this year since we haven’t seen the sign that showing the price may go up. Now most state-owned plants are still running normally since they have production tasks and social responsibility.
Asian Metal: How should the aluminum fluoride enterprises deal with the current situation?
Wei: According to the policies, aluminum fluoride plants with capacity lower than 20,000tpy will be shut down, but the total capacity is not restricted. Therefore, it will take a long time to solve the overcapacity problem. We must take some measures to ensure the normal operation. First of all, we are not eager to sell the products and the stock is around 3,000 tons. Secondly, we must lower the purchase price of raw materials, such as fluorspar, sulfuric acid and aluminum hydroxide. Thirdly, we should reduce other production costs. We must pay close attention to the management under the poor market situation.
Asian Metal: What is the annual production of your company?
Wei: We open two production lines and the plant now is running at full capacity of 60,000tpy.
Asian Metal: Is there any new development strategy of your company?
Wei: Currently, we have no new plan in hydrofluoric acid and aluminum fluoride market. Our group may not have investment in a short time, so we put the steady development in the first place.
Asian Metal: Thanks again for your cooperation. Respectfully wish your corporation progresses day by day.
Wei: Thank you!