Gang Xia: To build larger metal trading platform by innovation

Asian Metal: Good day, Mr. Xia. Thank you for granting this interview. Could you please make a brief introduction of your company?

Xia: Founded in 1992, our headquarter is located in Hong Kong, China, and we have been dealing with various import and export businesses of ferroalloy and minor metals for long, including manganese, silicon and magnesium metals, etc. Our total sales volume is expected to be RMB400 million (USD65.88 million) in 2013, equaling to that of last year.

Asian Metal: What’s your goal in 2014, especially for the manganese business?

Xia: We will continue to endeavor in innovation, aiming to build Million Link as a much larger metal trading platform and achieving a total sales volume of about RMB1,000 million (USD164.70 million), among which above 50 million (USD8.24 million) will come from manganese metal business.

In my opinion, the era of “Trading by building stocks” has gone for trading companies. So we will adopt pattern of “Low stocks, low profit and low risks”, do the import and export business more flexibly according to orders, and at the same time, we will endeavor in establishing direct cooperation with Chinese domestic steel mills, to make the trading volume increase substantially.

Asian Metal: Would you please further elaborate on your innovation?

Xia: For instance, we released our mobile application of “Mi Tender” on IOS system recently, and the Android version will come out soon. This is a brand new platform for communication between Million Link and our global suppliers, as well as the clients, who can quote, negotiate and even make the deal with our company there, breaking through limitation of time and distance. And I believe the platform will bring much help to our business development.

Asian Metal: How do you think of the VAT dodging behaviors in the Chinese manganese metal export market in the second half of 2013?

Xia: As we all known, the Chinese manganese export duty was removed on January 1, 2013, which brought benefits to formal export traders like Million Link. However, some export traders have been doing the export business by VAT dodging for months, intending to win orders by offering prices USD50-100/t lower than the mainstream prices. And I think it gains negative influence on Chinese manganese export market and has done harm to formal participants. I urge the government to strengthen supervision and stop this kind of behaviors.

Asian Metal: Some manganese traders are trying to build their own plants in order to reduce costs, will you consider this method?

Xia: Actually, we have tried this method among other metal business before, but the result came out to be unsatisfactory. I believe it is better for traders to get the dealership by joint stocks, rather than operating plants by their own. So as a professional trading company, we will focus on building a much larger trading platform for metal trading, trade financing and information technology in the coming years.

Asian Metal: What’s your main concern when choosing a long-term manganese supplier?

Xia: We take export performance, financial condition, technology capacity, as well as its environmental protection level into consideration, which have great influence on steady supply of the materials from the company. Most of our manganese suppliers are traders now, but we also intend to establish long-term cooperation with appropriate producers.

Asian Metal: How do you think of the present status of closing down outdated production facilities in China?

Xia: I think we should regard environmental conditions as the standard, rather than judging from the size of facilities or the plants. It is worth noting that some small producers with good environmental conditions were shut down due to the size, which will make others to believe that they should expand the production capacity as much as possible, and it will cause harms to the whole industry.

Asian Metal: What are the core competences of your company as a big trader?

Xia: Firstly, we hold excellent credit record and are highly recognized by participants after works of above 20 years. Secondly, we can take full advantage of various financing means and low interest rate in Hong Kong, which allows us to stick to the method of “Paying for suppliers earlier and getting repay from end users later”.

Asian Metal: Would you please make a market forecast of manganese, as well as other metals?

Xia: I believe most minor metal and ferroalloy markets, including manganese, will keep on running at low prices while high quantities. It will be more difficult for producers to lower production costs in the coming year. But on the other side, price competition will become much fierce among suppliers, with outputs of products like manganese increasing gradually. And Million Link aims to expand the trading volume step by step in the era of “low profits”.

Asian Metal: We appreciate for your support to give us your valuable time and we wish a bright future for Million Link.