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May 27-28, 2021
Hangzhou, Zhejiang, China
11th Aluminum Raw Materials Summit
May 20-21, 2021
Hangzhou, Zhejiang, China
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April 15-16, 2021
Hangzhou, Zhejiang, China
13th World InBiGeGa Forum
March 25-26, 2021
Hangzhou, Zhejiang, China
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Changsha, Hunan, China
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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 Zhang Xiubao, General Manager of Baoding Exquisite Auto Aluminum Alloy Manufacture Co., Ltd
Exquisite Auto Aluminum Alloy Manufacture Co., Ltd., located at the west zone of Great Wall Auto Parts Park in Shunping County, Baoding City, Hebei Province. Start operating from July, 2011, the company is specialized in aluminum alloy ingot production targeting in middle-and-high-end markets, serving auto industry with a capacity of 50,000tpy in phase.
Zhang Xiubao: Chinese secondary aluminum alloy industry faces integration
----Interview with Zhang Xiubao, General Manager of Baoding Exquisite Auto Aluminum Alloy Manufacture Co., Ltd
Asian Metal: Nice to meet you, Mr. Zhang. First thank you for granting Asian Metal’s interview. Could you please introduce the current status and businesses of your company?
Zhang: Our company was founded in 2011 and met its first anniversary at the end of July. The designed capacity runs at 50,000tpy in phaseⅠand we have four sets of furnaces, two of 25T and two of 8T. There are lands near current plant areas reserved for further production expansion. We also produce downstream aluminum castings and autos parts in Great Wall Auto Parts Park. Some of our aluminum alloy ingots are for internal downstream consumption while most supply for outer market especially the auto industry. This requires us to procure clean and high quality raw materials.
Great Wall Auto develops fast despite the sluggishness in whole auto industry, so internal aluminum alloy ingot consumption accounted for higher ratio currently.
Asian Metal: It seems that Chinese domestic secondary aluminum alloy market is experiencing the most difficult period after 2008 economic crisis, and aluminum alloy ingot price kept decreasing recently. Could you please give a short introduction about current secondary aluminum market?
Zhang: Traditional slack season for Chinese domestic aluminum alloy ingot typically lasts from June to August. However, the whole industry entered the slack season quite early in May this year. Plants compete with each other fiercely by beating down prices due to decreasing demand, so profits shrink as products price gets closer to raw material price and we mainly focus on cost problems currently.
Asian Metal: As operating rate has kept decreasing in many Chinese domestic secondary aluminum plants since May while new capacity emerges here and there, the whole secondary aluminum industry is about to integrate this year. What is your viewpoint on this phenomenon? Does Exquisite Auto Aluminum Alloy have plans to expand this year?
Zhang: Exactly. Chinese secondary aluminum alloy industry is about to shuffle this year with plants competing fiercely through price war. But new capacity emerges constantly and it impacted greatly on middle and small-sized plants. We are under great pressure especially when some large plants offered very low.
Producing capacity keeps expanding due to relatively easy technical access with ample competition in this industry. If automotive industry develops further, cars of joint venture is bound to pursuit of localization and lighter weight, which is a good opportunity for aluminum alloy industry. Japanese auto industry has already made this step while European and American auto sectors are stepping toward this direction. This indicates a bright outlook of aluminum alloy industry without too large capacity surplus currently.
We do not plan to expand our capacity as our current plant does not achieve mass production this year.
Asian Metal: How does secondary aluminum market go in the whole Hebei Province currently?
Zhang: Seen from producing capacity, only Hebei Lizhong Group and our company are of large scale with not big production capacity in general. However, there are two problems.
Firstly, consumer market is not in Hebei as limited downstream die-casing plants mostly gather in the south despite a relatively small production capacity in Hebei.
Secondly, there are plenty of family workshops as well as small plants locally that offer low, which has a certain impact on the market. Most small plants operate easily as they produce more in busy season and draw back in off season and they sometimes are free from the management of local environment protection bureau. Nevertheless, our company does not compete with small plants at one stage as their products’ quality cannot compare with ours.
Asian Metal: How do you view on the sluggish Chinese aluminum alloy export market recently? How’s the preparation for export in your company and do you come across any problems?
Zhang: Aluminum alloy export generally requires 15% of tariff so you must do processing if you want to export aluminum alloy, i.e. aluminum scrap import before aluminum alloy export. We have been planning aluminum alloy export business and we have established effective contracts with foreign clients. However, we haven’t got aluminum scrap import license yet. The State Environmental Protection Administration becomes stricter in managing aluminum scrap import and it takes time to get the license. Our company has laid great emphasis on environmental protection since it was put into operation and we have confidence in obtaining the license which is expected to be issued in November, so export business is likely to be carried out by the end of this year. We will choose Tianjin Port as the main export port by then.
Asian Metal: Pessimism is popular among secondary aluminum market currently, so how do you view on the market in the short-and-medium term? Do you think the “golden September and silver October” phenomenon in auto market will come this year?
Zhang: The development of downstream automobile market is particularly important for aluminum industry. After the period of rapid development in 2009 and 2010, the automotive industry in China has run at a smoothly low pace since last year. The Great Wall Auto developments optimistically, but the whole scenario of domestic automobile industry is quite grim this year. Even if the auto industry greets the “golden September and silver October”, it will push up the upstream aluminum alloy market limitedly as well as the whole state. I think our Great Wall Auto may be boosted to some extent but unlikely to return to the level in March and April this year.
Asian Metal: The overall economic situation is not very good in 2012. Do you think that the government will issue policies to support the automobile industry or to boost economic recovery?
Zhang: The central government invested RMB 4 trillion (USD 0.63 trillion) to rescue the market in the financial crisis of 2008. It sped up the economic recovery on the surface, but the consequences are very serious. Except for China, other countries all suffered. The RMB 4 trillion (USD 0.63 trillion) also brought high inflation, so the central government is unlikely to introduce such big plans again even if the economic situation is equally grim this year. The government chooses to give rights to local government to make supportive policies, but so far we haven’t seen such policies released locally. Some areas laid stimulating policies such as tax cuts, but I think such policies may be beneficial for large enterprises yet has little effect on small-scaled enterprises.
Asian Metal: Thanks very much for your time and your support for Asian Metal. Wish your company better development!
Zhang: Our company was founded in 2011 and met its first anniversary at the end of July. The designed capacity runs at 50,000tpy in phaseⅠand we have four sets of furnaces, two of 25T and two of 8T. There are lands near current plant areas reserved for further production expansion. We also produce downstream aluminum castings and autos parts in Great Wall Auto Parts Park. Some of our aluminum alloy ingots are for internal downstream consumption while most supply for outer market especially the auto industry. This requires us to procure clean and high quality raw materials.
Great Wall Auto develops fast despite the sluggishness in whole auto industry, so internal aluminum alloy ingot consumption accounted for higher ratio currently.
Asian Metal: It seems that Chinese domestic secondary aluminum alloy market is experiencing the most difficult period after 2008 economic crisis, and aluminum alloy ingot price kept decreasing recently. Could you please give a short introduction about current secondary aluminum market?
Zhang: Traditional slack season for Chinese domestic aluminum alloy ingot typically lasts from June to August. However, the whole industry entered the slack season quite early in May this year. Plants compete with each other fiercely by beating down prices due to decreasing demand, so profits shrink as products price gets closer to raw material price and we mainly focus on cost problems currently.
Asian Metal: As operating rate has kept decreasing in many Chinese domestic secondary aluminum plants since May while new capacity emerges here and there, the whole secondary aluminum industry is about to integrate this year. What is your viewpoint on this phenomenon? Does Exquisite Auto Aluminum Alloy have plans to expand this year?
Zhang: Exactly. Chinese secondary aluminum alloy industry is about to shuffle this year with plants competing fiercely through price war. But new capacity emerges constantly and it impacted greatly on middle and small-sized plants. We are under great pressure especially when some large plants offered very low.
Producing capacity keeps expanding due to relatively easy technical access with ample competition in this industry. If automotive industry develops further, cars of joint venture is bound to pursuit of localization and lighter weight, which is a good opportunity for aluminum alloy industry. Japanese auto industry has already made this step while European and American auto sectors are stepping toward this direction. This indicates a bright outlook of aluminum alloy industry without too large capacity surplus currently.
We do not plan to expand our capacity as our current plant does not achieve mass production this year.
Asian Metal: How does secondary aluminum market go in the whole Hebei Province currently?
Zhang: Seen from producing capacity, only Hebei Lizhong Group and our company are of large scale with not big production capacity in general. However, there are two problems.
Firstly, consumer market is not in Hebei as limited downstream die-casing plants mostly gather in the south despite a relatively small production capacity in Hebei.
Secondly, there are plenty of family workshops as well as small plants locally that offer low, which has a certain impact on the market. Most small plants operate easily as they produce more in busy season and draw back in off season and they sometimes are free from the management of local environment protection bureau. Nevertheless, our company does not compete with small plants at one stage as their products’ quality cannot compare with ours.
Asian Metal: How do you view on the sluggish Chinese aluminum alloy export market recently? How’s the preparation for export in your company and do you come across any problems?
Zhang: Aluminum alloy export generally requires 15% of tariff so you must do processing if you want to export aluminum alloy, i.e. aluminum scrap import before aluminum alloy export. We have been planning aluminum alloy export business and we have established effective contracts with foreign clients. However, we haven’t got aluminum scrap import license yet. The State Environmental Protection Administration becomes stricter in managing aluminum scrap import and it takes time to get the license. Our company has laid great emphasis on environmental protection since it was put into operation and we have confidence in obtaining the license which is expected to be issued in November, so export business is likely to be carried out by the end of this year. We will choose Tianjin Port as the main export port by then.
Asian Metal: Pessimism is popular among secondary aluminum market currently, so how do you view on the market in the short-and-medium term? Do you think the “golden September and silver October” phenomenon in auto market will come this year?
Zhang: The development of downstream automobile market is particularly important for aluminum industry. After the period of rapid development in 2009 and 2010, the automotive industry in China has run at a smoothly low pace since last year. The Great Wall Auto developments optimistically, but the whole scenario of domestic automobile industry is quite grim this year. Even if the auto industry greets the “golden September and silver October”, it will push up the upstream aluminum alloy market limitedly as well as the whole state. I think our Great Wall Auto may be boosted to some extent but unlikely to return to the level in March and April this year.
Asian Metal: The overall economic situation is not very good in 2012. Do you think that the government will issue policies to support the automobile industry or to boost economic recovery?
Zhang: The central government invested RMB 4 trillion (USD 0.63 trillion) to rescue the market in the financial crisis of 2008. It sped up the economic recovery on the surface, but the consequences are very serious. Except for China, other countries all suffered. The RMB 4 trillion (USD 0.63 trillion) also brought high inflation, so the central government is unlikely to introduce such big plans again even if the economic situation is equally grim this year. The government chooses to give rights to local government to make supportive policies, but so far we haven’t seen such policies released locally. Some areas laid stimulating policies such as tax cuts, but I think such policies may be beneficial for large enterprises yet has little effect on small-scaled enterprises.
Asian Metal: Thanks very much for your time and your support for Asian Metal. Wish your company better development!