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 Danny Wu, General Manager of Xiamen Minglu Int’l Trading Co. Ltd., Marketing Director of Xiamen Tungsten Co., Ltd.
Wu Danny: Tungsten market outlook optimistic
----Interview with Danny Wu, General Manager of Xiamen Minglu Int’l Trading Co. Ltd., Marketing Director of Xiamen Tungsten Co., Ltd.
Xiamen Tungsten Co., Ltd(XTC)was founded in December of 1997 by seven share holders, the major shareholders of which are the Fujian Metallurgic Co., Ltd(Holding), the Minmetals Development Co., LTD and the A.L.M.T.Corp (Japan). XTC has presently over 3000 employees, 10 subsidiary companies, a total asset of more than 2 billion RMB and a net asset of 1.7 billon RMB.
The business of XTC covers many industrial segments, including the tungsten industry, the molybdenum industry, the cobalt industry, the hydrogen storage alloys and the real estate. XTC is producing various downstream products from the metals processed from mines by her subsidiary companies. Presently XTC has a capacity of 12,000 tons of ammonium paratungstate(APT), 5,000 tons of W-powder, 3,500 tons of WC powder, 2,000 tons of RTP powder and 1,000 tons of WC tool bits, 1,800 tons of coarse W wires, 10 billion meters of fine W wires, 1,000 tons of coarse Mo wires and 1.2 billion meters of fine Mo wires. XTC is also producing many cobalt-containing products, including 2,000 tons of fine of hydrogen storage alloy powders, 2,000 tons of cobalt oxides and 2,000 tons of lithium cobalt dioxide and 500 tons of spherical nickel hydroxide. Being a leading exporter of tungsten and molybdenum intermediate products in China, the XTC has significant market shares in several dozen countries in the entire world and over 35% of the total export volume of China.
Asian Metal: Thank you for accepting Asian Metal interview. Xiamen Tungsten is one of the biggest exporters of tungsten products in China. Could you briefly summarize the Chinese tungsten export market in 2009?
Wu: I think there are not many bright spots in 2009 tungsten export market, the export volume decreased greatly compared to that in 2008. Of course, the situation in 2009 was special due to the financial crisis, and it changed drastically in the first half of 2010. The export market is now almost the same as it was in 2008 now.
Asian Metal: Things were tough in 2009, especially in the first half of 2009. We only saw recoveries in both demand and price from last November. How do you analyze the foreign purchasing of tungsten products in 2009.
Wu: The situation in 2009 was abnormal due to the financial crisis, and most foreign consumers re-evaluated and adjusted their stock level. Because production decreased, so the stock level increased exponentially. It was difficult for the consumers to make strategic plans. For example, most Japanese consumers decreased their stock level. Chinese export volume decreased by more than 50%, but it only reflected the stock level not the real consumption. Consumption did not decline so much.
Asian Metal: As a result of the financial crisis, many foreign companies laid off workers to reduce production cost.
Wu: Yes. According to related news, companies such as Sandvik, Kennametals, and many others laid off workers.
Asian Metal: Before last November, purchasing was not active from overseas consumers, and then we saw a big leap in demand and prices.
Wu: That is correct. Economy recovered substantially, especially in USA, and demand from some industry recovered faster than expected. Therefore, we have seen the export volume and price rose greatly in the first half of this year.
Asian Metal: You just mentioned that some industry recovered faster than expected; can you be a little more specific?
Wu: One of the most obvious is the APT demand from petroleum catalyst production. There is a tendency, although not a mainstream trend, some company used to produce petroleum catalyst by using AMT, but AMT is more expensive than APT. The tungsten contents in APT and AMT are almost the same, so some people use APT to substitute AMT in some catalysts production, but not all.
Asian Metal: Recently, there is a rumor in the market that the Chinese government is likely to adjust export tax on some products with high energy consumption, high pollution and limited resources. Many market participants are concerned that export duty on APT and related products will increase. Do you also expect export duty to increase for the mentioned products?
Wu: I was surprised when I heard the rumor, because I think the reasons and conditions to increase the tariff are not sufficient. Some people may think the export market recovered, and increase tariff can lift the export price, but I think the logic is not correct. Increasing export duty is to control the export of this material, but we already have export quota and export licenses to limit tungsten export. If we raise the export duty now, the price may not follow, and it is possible to see lower price, then the Chinese exporters will have to bear the additional expenditure. We had such cast in the past.
Asian Metal: That is true. In June 2005, APT international prices reached its historical high of USD300/mtu, then it fell and stabilized at around USD250/mtu in the next several years, but from 2005 until now, the export duty already changed from 13% export rebate to now 5% export duty, so the Chinese suppliers bared extra cost.
Wu: Therefore, changes in export tariffs and prices do not necessarily related.
Asian Metal: Normally, we say July and August is the slow season. Do you expect the export volume and price to change in the next two months?
Wu: I feel tungsten market will keep relatively stable in the second half of the year, both domestic and foreign companies hope the market to remain stable. On the current conditions, I cannot sharp rise or fall. At one point, we may see minor adjustments, but I think the general trend is stable.
Asian Metal: Tungsten is “the teeth of industry”, and it is widely used in many industries, not replaceable by other material; market trend is large affected by general economy. Right now, people are talking about the possibility of “double dip”, what do you think?
Wu: There are many uncertainties in world economy, like the debt crisis in some European regions, but from the viewpoint of tungsten market, demand is going to be stable. Recently, I am concerned about the oil leak in Gulf of Mexico. US stopped all deep-water petroleum exploration, and so far there is no effect in shallow water and ground exploration. The economic recovery is lowing down, but overall is still promising.
Asian Metal: We learned a lot about the debt crisis of Southern European countries, but some European countries also benefit from depreciation of Euro, like Germany and France, because their products are more competitive in international market. Many tungsten manufacturers are optimistic about the future market as their business recovered to good shapes already.
Wu: Tungsten has it special characteristics. We saw prices of nickel, cobalt, molybdenum decreased, but tungsten price kept at relatively stable. I have shared some opinion with foreign partners, and most people are looking forwards to the future market, and they expect price and demand to keep the upward trend later this year.
Asian Metal: Another reason is we do not have export license left for the first half year, and there is almost no reason for price to fall.
Wu: Yes. The situation this year is totally different from last year. Last year, some exporters had licenses left over, but it will not happen this year. The expected export volume this year is going to be almost the same as it was in 2008, which is considered as a normal year. The foreign consumers are rational now, and some of them have re-stocked material earlier in the year, so it is not easy for them to accept higher prices. I do not see the possibility for tungsten price rise or fall in large range.
Asian Metal: This is about the sales, now let’s talk about supply. Not only controlling the export volume by export quota and export licenses, Chinese government also controls the tungsten concentrate production by giving mining quotas. Last year, the mining quota was 6500t, but the actual production was over 90,000t. This year, the mining quota is 80,000t, why is the actual production exceeding the quota volumes?
Wu: For several reasons: first, a part of the production is not within the controlling range. For example, there is molybdenum mines in Henan Luanchuan, and the residue of the molybdenum ore contains low grade of tungsten. The government encourages companies to recollect the tungsten from the residue. Within Luanchuan area, the volume of tungsten concentrate production can be 10,000t in one year time. Another reason is there are many small sized privately owned mines, which are very hard to control.
Asian Metal: Tungsten concentrate is in tight supply now, I learned that ferrotungsten and APT producers in Vietnam are not producing as they cannot find enough raw material, can you briefly comment about the foreign tungsten concentrate market?
Wu: There are some productions in Vietnam and Myanmar, but they need to buy from other places, like Mongolia, and the quality is not standard Foreign mining do not have as much norms as Chinese mines, and there is no standard for impurities. Only few mines have better qualities, such as mines in Portugal, the grade is high, around 70%, and the output is around 1,200t of WO3 content. The Malaga mine in Peru also produces good concentrate, and WO3 content can reach 65%, but the above two mines only supply to American users and prices are high. Other mines in Russia or Austria, produce 40-50% tungsten concentrate.
Asian Metal: Right now, there are a few mines in Australia which are under exploration, and some of them claimed the grade could reach 60% just by gravitation method.
Wu: If they are not too concerned about the recovery rates, then it is possible. In some cases, it is unnecessary for the grade to reach 65%, such as Austria’s mine. It is for its own use, and the output is about 1,200t of WO3 content. For them, 40% is the best grade, if they raise the grade to 60%, then the recovery rate will be low; it is uneconomical to do so. The mine has been in production for very long time, and the grade of ore is getting lower.
Asian Metal: This is an old mine. Compared to these mines, North American Tungsten Corporation is the biggest tungsten concentrate producer outside China, but they have not resumed production since it was closed in last October.
Wu: That is correct. As far as I know, they also want to reopen the production of Cantung, but they need to meet several conditions. They need to finance because their production cost is higher than others, but there is profit margin already at such APT price.
Asian Metal: APT price is around USD235/mtu right now, and wolframite 60%min price should be around USD180-185/mtu, but material sold to China is at lower price than this level.
Wu: The tungsten concentrate sold to China is of lower grade. In the international market, wolframite 65% should be at around USD190/mtu. Chinese domestic tungsten concentrate market is isolated because there is less production outside China. Chinese production of tungsten concentrate is sufficient, but it is illegal to export the material. Therefore, supply of tungsten concentrate will keep tight in overseas markets, and the price is normally 5-10% higher than that in China.
Asian Metal: I understand you buy tungsten concentrate at high price from foreign suppliers.
Wu: Our purpose is obvious, and that is to keep the shares for supply.
Asian Metal: I have always thought Xiamen Tungsten has a long vision for business development, like for tolling.
Wu: Yes, we buy tungsten concentrate from overseas market and use foreign resource. This is a good thing. We need to process 377t of tungsten ore to produce 1 ton of 65% tungsten concentrate. If the grade of the ore is low, then the production of tungsten ore is more, and the pollution is getting worse. Therefore, using foreign resources is good for domestic environment. The government encourages companies to buy or invest in tungsten concentrate production outside China.
Asian Metal: How many tons of tolling business is done by Xiamen Tungsten each year?
Wu: This depends on the foreign supply of raw material, and normally it is about half of our total production. Our customers send us the raw material and scraps for processing, and we produce goods send back to customers, achieved the rotation, and bonded suppliers and customers closely together.
Asian Metal: How many tons of recycle business each year?
Wu: It is about 2,000-3,000t per year. Chinese government has very restricted and complex policy on scraps importation. Both Chinese importers and foreign suppliers have to meet some standards.
Asian Metal: I have read that Xiamen tungsten recycles tungsten scraps, and the volume equal the productions of two medium sized tungsten mines.
Wu: One medium sized mine produces about 1,000t WO3 tungsten concentrate, and Xiamen Tungsten recycles close to 3,000t WO3 from tungsten scraps, almost the same as total productions of two or three medium sized tungsten mines.
Asian Metal: I feel Xiamen Tungsten’s supply of raw material is rational and diversified; you have your own tungsten mines, you buy from overseas, and you recycle from tungsten scraps.
Wu: Xiamen Tungsten has two tungsten mines, one is in Fujian Ninghua, and the other is in Henan Luanchuan. Our second major supply of raw material is buying in Chinese domestic market. We need 15,000t of raw material for our domestic production, and we have established good relationship with Chinese major mines.
Asian Metal: Right now, there are some other companies trying to go public listed, like Zhangyuan Tungsten went public listed in the beginning of this year. As far as I know, Jiangxi Rare Earth and Rare Metal Tungsten Company and Minmetals are preparing to go public. Xiamen Tungsten has been public listed since 2002, do you have any suggestion to the new comers?
Wu: The goal for listed companies is to expand and upgrade the production, and it will increase the domestic consumption. The growing domestic demand will push price higher.
Asian Metal: Talking about downstream products, there are many regions trying to eliminating traditional light bulb with LED, so the demand of tungsten in lightening industry may decrease in the future, but we are also seeing some new inventions which use tungsten as raw material. Which industry do you think will develop fast in the coming years?
Wu: Under the current circumstance, cemented carbide is still the major application of tungsten, and it will keep development well in the coming days.
Asian Metal: Let’s stop here for today. Thank you again for your support to Asian Metal!
Wu: Thanks!
The business of XTC covers many industrial segments, including the tungsten industry, the molybdenum industry, the cobalt industry, the hydrogen storage alloys and the real estate. XTC is producing various downstream products from the metals processed from mines by her subsidiary companies. Presently XTC has a capacity of 12,000 tons of ammonium paratungstate(APT), 5,000 tons of W-powder, 3,500 tons of WC powder, 2,000 tons of RTP powder and 1,000 tons of WC tool bits, 1,800 tons of coarse W wires, 10 billion meters of fine W wires, 1,000 tons of coarse Mo wires and 1.2 billion meters of fine Mo wires. XTC is also producing many cobalt-containing products, including 2,000 tons of fine of hydrogen storage alloy powders, 2,000 tons of cobalt oxides and 2,000 tons of lithium cobalt dioxide and 500 tons of spherical nickel hydroxide. Being a leading exporter of tungsten and molybdenum intermediate products in China, the XTC has significant market shares in several dozen countries in the entire world and over 35% of the total export volume of China.
Asian Metal: Thank you for accepting Asian Metal interview. Xiamen Tungsten is one of the biggest exporters of tungsten products in China. Could you briefly summarize the Chinese tungsten export market in 2009?
Wu: I think there are not many bright spots in 2009 tungsten export market, the export volume decreased greatly compared to that in 2008. Of course, the situation in 2009 was special due to the financial crisis, and it changed drastically in the first half of 2010. The export market is now almost the same as it was in 2008 now.
Asian Metal: Things were tough in 2009, especially in the first half of 2009. We only saw recoveries in both demand and price from last November. How do you analyze the foreign purchasing of tungsten products in 2009.
Wu: The situation in 2009 was abnormal due to the financial crisis, and most foreign consumers re-evaluated and adjusted their stock level. Because production decreased, so the stock level increased exponentially. It was difficult for the consumers to make strategic plans. For example, most Japanese consumers decreased their stock level. Chinese export volume decreased by more than 50%, but it only reflected the stock level not the real consumption. Consumption did not decline so much.
Asian Metal: As a result of the financial crisis, many foreign companies laid off workers to reduce production cost.
Wu: Yes. According to related news, companies such as Sandvik, Kennametals, and many others laid off workers.
Asian Metal: Before last November, purchasing was not active from overseas consumers, and then we saw a big leap in demand and prices.
Wu: That is correct. Economy recovered substantially, especially in USA, and demand from some industry recovered faster than expected. Therefore, we have seen the export volume and price rose greatly in the first half of this year.
Asian Metal: You just mentioned that some industry recovered faster than expected; can you be a little more specific?
Wu: One of the most obvious is the APT demand from petroleum catalyst production. There is a tendency, although not a mainstream trend, some company used to produce petroleum catalyst by using AMT, but AMT is more expensive than APT. The tungsten contents in APT and AMT are almost the same, so some people use APT to substitute AMT in some catalysts production, but not all.
Asian Metal: Recently, there is a rumor in the market that the Chinese government is likely to adjust export tax on some products with high energy consumption, high pollution and limited resources. Many market participants are concerned that export duty on APT and related products will increase. Do you also expect export duty to increase for the mentioned products?
Wu: I was surprised when I heard the rumor, because I think the reasons and conditions to increase the tariff are not sufficient. Some people may think the export market recovered, and increase tariff can lift the export price, but I think the logic is not correct. Increasing export duty is to control the export of this material, but we already have export quota and export licenses to limit tungsten export. If we raise the export duty now, the price may not follow, and it is possible to see lower price, then the Chinese exporters will have to bear the additional expenditure. We had such cast in the past.
Asian Metal: That is true. In June 2005, APT international prices reached its historical high of USD300/mtu, then it fell and stabilized at around USD250/mtu in the next several years, but from 2005 until now, the export duty already changed from 13% export rebate to now 5% export duty, so the Chinese suppliers bared extra cost.
Wu: Therefore, changes in export tariffs and prices do not necessarily related.
Asian Metal: Normally, we say July and August is the slow season. Do you expect the export volume and price to change in the next two months?
Wu: I feel tungsten market will keep relatively stable in the second half of the year, both domestic and foreign companies hope the market to remain stable. On the current conditions, I cannot sharp rise or fall. At one point, we may see minor adjustments, but I think the general trend is stable.
Asian Metal: Tungsten is “the teeth of industry”, and it is widely used in many industries, not replaceable by other material; market trend is large affected by general economy. Right now, people are talking about the possibility of “double dip”, what do you think?
Wu: There are many uncertainties in world economy, like the debt crisis in some European regions, but from the viewpoint of tungsten market, demand is going to be stable. Recently, I am concerned about the oil leak in Gulf of Mexico. US stopped all deep-water petroleum exploration, and so far there is no effect in shallow water and ground exploration. The economic recovery is lowing down, but overall is still promising.
Asian Metal: We learned a lot about the debt crisis of Southern European countries, but some European countries also benefit from depreciation of Euro, like Germany and France, because their products are more competitive in international market. Many tungsten manufacturers are optimistic about the future market as their business recovered to good shapes already.
Wu: Tungsten has it special characteristics. We saw prices of nickel, cobalt, molybdenum decreased, but tungsten price kept at relatively stable. I have shared some opinion with foreign partners, and most people are looking forwards to the future market, and they expect price and demand to keep the upward trend later this year.
Asian Metal: Another reason is we do not have export license left for the first half year, and there is almost no reason for price to fall.
Wu: Yes. The situation this year is totally different from last year. Last year, some exporters had licenses left over, but it will not happen this year. The expected export volume this year is going to be almost the same as it was in 2008, which is considered as a normal year. The foreign consumers are rational now, and some of them have re-stocked material earlier in the year, so it is not easy for them to accept higher prices. I do not see the possibility for tungsten price rise or fall in large range.
Asian Metal: This is about the sales, now let’s talk about supply. Not only controlling the export volume by export quota and export licenses, Chinese government also controls the tungsten concentrate production by giving mining quotas. Last year, the mining quota was 6500t, but the actual production was over 90,000t. This year, the mining quota is 80,000t, why is the actual production exceeding the quota volumes?
Wu: For several reasons: first, a part of the production is not within the controlling range. For example, there is molybdenum mines in Henan Luanchuan, and the residue of the molybdenum ore contains low grade of tungsten. The government encourages companies to recollect the tungsten from the residue. Within Luanchuan area, the volume of tungsten concentrate production can be 10,000t in one year time. Another reason is there are many small sized privately owned mines, which are very hard to control.
Asian Metal: Tungsten concentrate is in tight supply now, I learned that ferrotungsten and APT producers in Vietnam are not producing as they cannot find enough raw material, can you briefly comment about the foreign tungsten concentrate market?
Wu: There are some productions in Vietnam and Myanmar, but they need to buy from other places, like Mongolia, and the quality is not standard Foreign mining do not have as much norms as Chinese mines, and there is no standard for impurities. Only few mines have better qualities, such as mines in Portugal, the grade is high, around 70%, and the output is around 1,200t of WO3 content. The Malaga mine in Peru also produces good concentrate, and WO3 content can reach 65%, but the above two mines only supply to American users and prices are high. Other mines in Russia or Austria, produce 40-50% tungsten concentrate.
Asian Metal: Right now, there are a few mines in Australia which are under exploration, and some of them claimed the grade could reach 60% just by gravitation method.
Wu: If they are not too concerned about the recovery rates, then it is possible. In some cases, it is unnecessary for the grade to reach 65%, such as Austria’s mine. It is for its own use, and the output is about 1,200t of WO3 content. For them, 40% is the best grade, if they raise the grade to 60%, then the recovery rate will be low; it is uneconomical to do so. The mine has been in production for very long time, and the grade of ore is getting lower.
Asian Metal: This is an old mine. Compared to these mines, North American Tungsten Corporation is the biggest tungsten concentrate producer outside China, but they have not resumed production since it was closed in last October.
Wu: That is correct. As far as I know, they also want to reopen the production of Cantung, but they need to meet several conditions. They need to finance because their production cost is higher than others, but there is profit margin already at such APT price.
Asian Metal: APT price is around USD235/mtu right now, and wolframite 60%min price should be around USD180-185/mtu, but material sold to China is at lower price than this level.
Wu: The tungsten concentrate sold to China is of lower grade. In the international market, wolframite 65% should be at around USD190/mtu. Chinese domestic tungsten concentrate market is isolated because there is less production outside China. Chinese production of tungsten concentrate is sufficient, but it is illegal to export the material. Therefore, supply of tungsten concentrate will keep tight in overseas markets, and the price is normally 5-10% higher than that in China.
Asian Metal: I understand you buy tungsten concentrate at high price from foreign suppliers.
Wu: Our purpose is obvious, and that is to keep the shares for supply.
Asian Metal: I have always thought Xiamen Tungsten has a long vision for business development, like for tolling.
Wu: Yes, we buy tungsten concentrate from overseas market and use foreign resource. This is a good thing. We need to process 377t of tungsten ore to produce 1 ton of 65% tungsten concentrate. If the grade of the ore is low, then the production of tungsten ore is more, and the pollution is getting worse. Therefore, using foreign resources is good for domestic environment. The government encourages companies to buy or invest in tungsten concentrate production outside China.
Asian Metal: How many tons of tolling business is done by Xiamen Tungsten each year?
Wu: This depends on the foreign supply of raw material, and normally it is about half of our total production. Our customers send us the raw material and scraps for processing, and we produce goods send back to customers, achieved the rotation, and bonded suppliers and customers closely together.
Asian Metal: How many tons of recycle business each year?
Wu: It is about 2,000-3,000t per year. Chinese government has very restricted and complex policy on scraps importation. Both Chinese importers and foreign suppliers have to meet some standards.
Asian Metal: I have read that Xiamen tungsten recycles tungsten scraps, and the volume equal the productions of two medium sized tungsten mines.
Wu: One medium sized mine produces about 1,000t WO3 tungsten concentrate, and Xiamen Tungsten recycles close to 3,000t WO3 from tungsten scraps, almost the same as total productions of two or three medium sized tungsten mines.
Asian Metal: I feel Xiamen Tungsten’s supply of raw material is rational and diversified; you have your own tungsten mines, you buy from overseas, and you recycle from tungsten scraps.
Wu: Xiamen Tungsten has two tungsten mines, one is in Fujian Ninghua, and the other is in Henan Luanchuan. Our second major supply of raw material is buying in Chinese domestic market. We need 15,000t of raw material for our domestic production, and we have established good relationship with Chinese major mines.
Asian Metal: Right now, there are some other companies trying to go public listed, like Zhangyuan Tungsten went public listed in the beginning of this year. As far as I know, Jiangxi Rare Earth and Rare Metal Tungsten Company and Minmetals are preparing to go public. Xiamen Tungsten has been public listed since 2002, do you have any suggestion to the new comers?
Wu: The goal for listed companies is to expand and upgrade the production, and it will increase the domestic consumption. The growing domestic demand will push price higher.
Asian Metal: Talking about downstream products, there are many regions trying to eliminating traditional light bulb with LED, so the demand of tungsten in lightening industry may decrease in the future, but we are also seeing some new inventions which use tungsten as raw material. Which industry do you think will develop fast in the coming years?
Wu: Under the current circumstance, cemented carbide is still the major application of tungsten, and it will keep development well in the coming days.
Asian Metal: Let’s stop here for today. Thank you again for your support to Asian Metal!
Wu: Thanks!