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 Xie Hong, President of Yunnan Guichu Logistics Co., Ltd.
Yunnan Guichu Logistics Co., Ltd. (Guichu Logistics), established in May, 2008, is a company specializing in silicon metal warehouse and logistics. Predecessor is Metallurgical Machine Shop, which is established on April 1st, 2005 and the first private silicon metal logistics company in Yunnan. Guichu Logistics, with support from Yunnan Metallurgy Group Warehouse Company, has become a leader in the industry in Yunnan after seven years efforts to forge its own brand and reputation in various big and small warehousing business, providing trading platform and related service for over 60% of silicon metal producers in the province and over 200 silicon metal buyers in and out of the province.
Xie Hong: Recent silicon metal market in China and the new silicon metal trading pattern in Yunnan
----Interview with Xie Hong, President of Yunnan Guichu Logistics Co., Ltd.
Asian Metal: Good day, Mr. Xie. Thanks for granting the interview of Asian Metal. Firstly, please make a brief introduction of Yunnan Guichu Logistics Co., Ltd.
Xie: Yunnan Guichu Logistics Co., Ltd. is one of the most professional and large-scale silicon metal warehouses and trading platforms in China and even the world, with a dealing volume of over 200,000t of silicon metal per year. After seven years’ development, besides those general service that mainly warehousing companies can provide, Guichu Logistics could provide the buyers and sellers a safe trading platform like “Alipay”, which guarantees the safety of the capital and goods of the contracting parties and ensures the quality of the dealing goods. In 2012, we started the strategic cooperation with SGS and introduced SGS standard into silicon metal testing market in Yunnan, providing an independent third party inspection institution for the buyers and sellers. We provide trading platform and related service for over 60% of silicon metal producers in the province and over 200 silicon metal buyers in and out of the province.
Asian Metal: Yunnan is one of the major silicon metal production areas in China. Please briefly tell us the distribution of silicon metal smelters in Yunnan, and the development of the silicon metal industry in Yunnan and its advantages.
Xie: Silicon metal smelters in Yunnan mainly locate in Dehong, Baoshan, Nujiang, Lincang and Wenshan. There are around 70 silicon metal smelters with over 130 furnaces in Yunnan. The output of silicon metal in Yunnan was around 400,000t last year.
Yunnan silicon metal industry is competitive in the quality, quantity, scale, variety and technology. At the beginning of the industry development, the relatively lower hydropower price, the abundant charcoal resources and the high-quality silica are the main competitiveness. However, the competitiveness is vanishing gradually and Yunnan silicon metal industry will also experience a period of shuffle. In the future, the advantages of silicon metal industry in Yunnan will be: Firstly, the technology and quality; secondly, the “Alipay-like” trading platform.
Asian Metal: As a professional warehousing and logistics company, could you please introduce the trading pattern of silicon metal in Yunnan and the outlook of warehouse and logistics?
Xie: The silicon metal trading pattern in Yunnan is as follows: The third part, warehousing company, plays an “Alipay-like” role. The warehousing company ensures the safety of capital and goods of the contracting parties, and ensures collected and delivered in the warehouse in Kunming.
The “Alipay-like” trading platform for silicon metal industry in Yunnan is competitive. The development of the silicon metal plants in Yunnan makes “Guichu Logistics” to move up, and “Guichu Logistics” will continue to make efforts to provide a reliable trading platform for the contracting parties and to make the Yunnan silicon metal trading pattern to be a standard in the overall market in China.
Asian Metal: Under the weak global economy, the downstream industries for silicon metal are slow and demand for silicon metal decreases this year. Chinese silicon metal prices dropped continuously after the Spring Festival holiday (in February) until July and many silicon metal plants could not maintain production. How do you think about the Chinese silicon metal market?
Xie: The market trend of silicon metal indicates the economic trend in China. The harm of China four trillion Yuan bail-out package began to show up after the subprime crisis in 2008. The hidden danger of the oversupply in silicon metal industry have showed up since the second half of last year as the withering of overall downstream industry led to sharp decreases of silicon metal demand while the government cannot either persist in investing or issue large simulating plans for the economy which would run with low demand. Silicon metal industry is also about to shuffle as some enterprises bearing high electricity fees such as those in Guizhou, Hunan, Guangxi and Fujian, etc will be eliminated, leaving enterprises in Yunnan, Xinjiang and some areas in Sichuan to be the winners to survive and to compete with each other like the Three Kingdoms era in ancient China.
Asian Metal: What’s the current electricity price level for the silicon metal plants in Yunnan? How is the operating rate for smelters and the inventory situation?
Xie: Under the overall weak economy, the operating rate for silicon metal plants kept low before July, and the output and inventory in the market even did not reach half of the level of last year. In the dull market, there were some favorable policies on the electricity price from local government and the operating rate for silicon metal smelters increased a bit under the stimulation and pressure from government. It is expected that the inventory for silicon metal in the market will increase a bit in late August and early September.
Asian Metal: The output of silicon metal in Xinjiang increases a lot this year. Are there any influences on Yunnan silicon metal market?
Asian Metal: After the visit to Xinjiang in July this year, I found that the output of silicon metal in Xinjiang did not release largely. Under the weak market, the output for silicon metal in Xinjiang only reached around 2/5 of that in Yunnan and the silicon metal market in Xinjiang has not brought great shock to the market in Yunnan. Xinjiang has larger silicon metal market share in North China, while Yunnan is more competitive in South China. However, Xinjiang will show greater competition after November this year as most silicon metal plants in South China could only run part of its capacity in the dry season, while most smelters in Xinjiang could maintain normal production with the relatively lower electricity price.
Asian Metal: Chinese silicon metal market turned stable gradually recently. How do you think about the future market trend?
Xie: Some local governments lowered the electricity price further recently to promote silicon metal smelters to resume production to reach the goal of local GDP, but it cannot solve the problem of oversupply of silicon metal in the market. To decrease the electricity price is a game playing among different local governments. If the electricity price in Xinjiang and Sichuan also decreases further, Chinese silicon metal market will be in large oversupply again and the prices will drop further.
The future silicon metal market trend will become clear in late August and early September. I think there are two possibilities in the market:
Firstly, silicon metal prices continue to drop by around RMB300-500/t. Then more smelters will stop production and the demand and supply in the market will reach a balance. At the time, Chinese silicon metal prices will touch the floor this year. The market is likely to see a rebound afterwards, and the rising margin of prices may be around RMB600-1,000/t.
Secondly, silicon metal prices will continue to see little fluctuation in the near future. Into September, overseas buyers will come back to the market gradually after the summer holiday. If the purchase increases in the market, Chinese silicon metal prices will go up by around RMB300-500/t.
Based on the market situation in the recent days, I think the possibility of the second future trend is larger.
Asian Metal: Do you have any suggestions to the healthy development of silicon metal industry?
Xie: During the dull period of silicon metal market, the quality of materials is the key to smelters’ survival and development. I expect that silicon metal smelters will raise the consciousness of quality of materials and enhance the inspection of quality to meet different demand from different clients and to seize the chance of development in a new round of economic recovery.
Asian Metal: Does your company have any development plans in the near future?
Xie: Main businesses of our company this year are to help enhance the accuracy of product analysis for Yunnan silicon metal enterprises, and to reduce disputes aroused by wrong product analysis. We will focus on the following two aspects:
Firstly, invited by the “National Technical Commission of Non-ferrous Metal Standardization” with honor recently, we will attend the preliminary hearing meeting, the approving meeting and the discussion meeting for“Silicon Metal” standard setting in Guiyang on 3rd to 6th, September, aiming at assisting “China National Standardization Management Committee” to implement national standard for “Silicon Metal”. Eleven units from silicon metal market will attend it, including three seats for units in Yunnan and our company is the only third party logistics enterprise (The rest 10 units include nine silicon metal manufacturers and one guild of silicon bunch). It shows the indispensible role the third party logistics enterprise plays in the national standard drafting. Being helpful in silicon metal industry has always been our biggest wish.
Secondly, with the joining of the most authoritative third party inspection institution since our partnership with SGS began in this April, disputes over quality problems have decreased noticeably. We hope to assist in the preliminary exploring of silicon metal standardization contract drafting.
At last, we hope to get supports from all enterprises in the industry and contribute together to the sustainable and healthy development of silicon metal industry.
Asian Metal: Thanks for your share and support of Asian Metal, Mr. Xie.
Xie: Thank you.
Xie: Yunnan Guichu Logistics Co., Ltd. is one of the most professional and large-scale silicon metal warehouses and trading platforms in China and even the world, with a dealing volume of over 200,000t of silicon metal per year. After seven years’ development, besides those general service that mainly warehousing companies can provide, Guichu Logistics could provide the buyers and sellers a safe trading platform like “Alipay”, which guarantees the safety of the capital and goods of the contracting parties and ensures the quality of the dealing goods. In 2012, we started the strategic cooperation with SGS and introduced SGS standard into silicon metal testing market in Yunnan, providing an independent third party inspection institution for the buyers and sellers. We provide trading platform and related service for over 60% of silicon metal producers in the province and over 200 silicon metal buyers in and out of the province.
Asian Metal: Yunnan is one of the major silicon metal production areas in China. Please briefly tell us the distribution of silicon metal smelters in Yunnan, and the development of the silicon metal industry in Yunnan and its advantages.
Xie: Silicon metal smelters in Yunnan mainly locate in Dehong, Baoshan, Nujiang, Lincang and Wenshan. There are around 70 silicon metal smelters with over 130 furnaces in Yunnan. The output of silicon metal in Yunnan was around 400,000t last year.
Yunnan silicon metal industry is competitive in the quality, quantity, scale, variety and technology. At the beginning of the industry development, the relatively lower hydropower price, the abundant charcoal resources and the high-quality silica are the main competitiveness. However, the competitiveness is vanishing gradually and Yunnan silicon metal industry will also experience a period of shuffle. In the future, the advantages of silicon metal industry in Yunnan will be: Firstly, the technology and quality; secondly, the “Alipay-like” trading platform.
Asian Metal: As a professional warehousing and logistics company, could you please introduce the trading pattern of silicon metal in Yunnan and the outlook of warehouse and logistics?
Xie: The silicon metal trading pattern in Yunnan is as follows: The third part, warehousing company, plays an “Alipay-like” role. The warehousing company ensures the safety of capital and goods of the contracting parties, and ensures collected and delivered in the warehouse in Kunming.
The “Alipay-like” trading platform for silicon metal industry in Yunnan is competitive. The development of the silicon metal plants in Yunnan makes “Guichu Logistics” to move up, and “Guichu Logistics” will continue to make efforts to provide a reliable trading platform for the contracting parties and to make the Yunnan silicon metal trading pattern to be a standard in the overall market in China.
Asian Metal: Under the weak global economy, the downstream industries for silicon metal are slow and demand for silicon metal decreases this year. Chinese silicon metal prices dropped continuously after the Spring Festival holiday (in February) until July and many silicon metal plants could not maintain production. How do you think about the Chinese silicon metal market?
Xie: The market trend of silicon metal indicates the economic trend in China. The harm of China four trillion Yuan bail-out package began to show up after the subprime crisis in 2008. The hidden danger of the oversupply in silicon metal industry have showed up since the second half of last year as the withering of overall downstream industry led to sharp decreases of silicon metal demand while the government cannot either persist in investing or issue large simulating plans for the economy which would run with low demand. Silicon metal industry is also about to shuffle as some enterprises bearing high electricity fees such as those in Guizhou, Hunan, Guangxi and Fujian, etc will be eliminated, leaving enterprises in Yunnan, Xinjiang and some areas in Sichuan to be the winners to survive and to compete with each other like the Three Kingdoms era in ancient China.
Asian Metal: What’s the current electricity price level for the silicon metal plants in Yunnan? How is the operating rate for smelters and the inventory situation?
Xie: Under the overall weak economy, the operating rate for silicon metal plants kept low before July, and the output and inventory in the market even did not reach half of the level of last year. In the dull market, there were some favorable policies on the electricity price from local government and the operating rate for silicon metal smelters increased a bit under the stimulation and pressure from government. It is expected that the inventory for silicon metal in the market will increase a bit in late August and early September.
Asian Metal: The output of silicon metal in Xinjiang increases a lot this year. Are there any influences on Yunnan silicon metal market?
Asian Metal: After the visit to Xinjiang in July this year, I found that the output of silicon metal in Xinjiang did not release largely. Under the weak market, the output for silicon metal in Xinjiang only reached around 2/5 of that in Yunnan and the silicon metal market in Xinjiang has not brought great shock to the market in Yunnan. Xinjiang has larger silicon metal market share in North China, while Yunnan is more competitive in South China. However, Xinjiang will show greater competition after November this year as most silicon metal plants in South China could only run part of its capacity in the dry season, while most smelters in Xinjiang could maintain normal production with the relatively lower electricity price.
Asian Metal: Chinese silicon metal market turned stable gradually recently. How do you think about the future market trend?
Xie: Some local governments lowered the electricity price further recently to promote silicon metal smelters to resume production to reach the goal of local GDP, but it cannot solve the problem of oversupply of silicon metal in the market. To decrease the electricity price is a game playing among different local governments. If the electricity price in Xinjiang and Sichuan also decreases further, Chinese silicon metal market will be in large oversupply again and the prices will drop further.
The future silicon metal market trend will become clear in late August and early September. I think there are two possibilities in the market:
Firstly, silicon metal prices continue to drop by around RMB300-500/t. Then more smelters will stop production and the demand and supply in the market will reach a balance. At the time, Chinese silicon metal prices will touch the floor this year. The market is likely to see a rebound afterwards, and the rising margin of prices may be around RMB600-1,000/t.
Secondly, silicon metal prices will continue to see little fluctuation in the near future. Into September, overseas buyers will come back to the market gradually after the summer holiday. If the purchase increases in the market, Chinese silicon metal prices will go up by around RMB300-500/t.
Based on the market situation in the recent days, I think the possibility of the second future trend is larger.
Asian Metal: Do you have any suggestions to the healthy development of silicon metal industry?
Xie: During the dull period of silicon metal market, the quality of materials is the key to smelters’ survival and development. I expect that silicon metal smelters will raise the consciousness of quality of materials and enhance the inspection of quality to meet different demand from different clients and to seize the chance of development in a new round of economic recovery.
Asian Metal: Does your company have any development plans in the near future?
Xie: Main businesses of our company this year are to help enhance the accuracy of product analysis for Yunnan silicon metal enterprises, and to reduce disputes aroused by wrong product analysis. We will focus on the following two aspects:
Firstly, invited by the “National Technical Commission of Non-ferrous Metal Standardization” with honor recently, we will attend the preliminary hearing meeting, the approving meeting and the discussion meeting for“Silicon Metal” standard setting in Guiyang on 3rd to 6th, September, aiming at assisting “China National Standardization Management Committee” to implement national standard for “Silicon Metal”. Eleven units from silicon metal market will attend it, including three seats for units in Yunnan and our company is the only third party logistics enterprise (The rest 10 units include nine silicon metal manufacturers and one guild of silicon bunch). It shows the indispensible role the third party logistics enterprise plays in the national standard drafting. Being helpful in silicon metal industry has always been our biggest wish.
Secondly, with the joining of the most authoritative third party inspection institution since our partnership with SGS began in this April, disputes over quality problems have decreased noticeably. We hope to assist in the preliminary exploring of silicon metal standardization contract drafting.
At last, we hope to get supports from all enterprises in the industry and contribute together to the sustainable and healthy development of silicon metal industry.
Asian Metal: Thanks for your share and support of Asian Metal, Mr. Xie.
Xie: Thank you.