----Interview with Yijun Jiang
General Manager
Shangtong Guangtong New Materials Co., ltd.
Shandong Guangtong New Materials Co., Ltd. is a high-tech enterprise located in Zibo, Shandong. The company deeply engages in the fields of zirconium materials. With a bright market prospect, the company's products are widely used in 5G communications, intelligence terminals, aerospace, medicine and medical care, new energy, advanced refractory materials and other fields. "Guangtong" brand high-quality products are exported to more than 30 countries and regions such as Japan, South Korea, Southeast Asia, Europe, and the US.
Asian Metal: Thank you for joining our interview, Mr. Jiang, please introduce your company briefly.
Mr. Jiang: Shandong Guangtong New Materials Co., with a comprehensive processing capacity of 90,000 tons of zirconium products per year, focuses on producing zircon related chemical products, such as zirconium oxychloride, zirconium carbonate and zirconium dioxide. Our products are exported to more than 30 countries and regions such as Japan, South Korea, Southeast Asia, Europe, and the US. Our company has established solid cooperative relationships with international companies.
Asian Metal: As the biggest producer in China, how was your operating rate of zirconium oxychloride this year and how about the sales performance currently?
Mr. Jiang: Depressed by the dim macro-economy environment, the overall demand fell short of our expectation in 2023. We kept regular operating rates during the whole year except the periods for regular maintenance and extreme weather. We kept a basic balance between sales and production in the past month.
Asian Metal: How do you guarantee your products' quality to gain orders while maintaining the high operating rate in the long run?
Mr. Jiang: First, we're committed to environment protection and we put large amounts of fund to bring in waste-gas, waste-water and waste-residue treatment equipment. We're capable to keep our production line running regularly by well-cared of the three kinds of wastes. Secondly, we filtered zircon sand strictly at the beginning of the production to guarantee the quality of zirconium oxychloride We especially have strict control of the Fe content of zircon sand to produce zirconium oxychloride 36%min, Fe 5ppm max. .
Asian Metal：How about the zircon sand supply and prices before the Spring Festival holiday?
Mr. Jiang: First, the overall supply from international suppliers turned short in December, 2023, and the supply from domestic suppliers also turned tight along with the upcoming Chinese Spring Festival and active purchases from consumers. Our company only holds some zircon sand inventories that only could manage to maintain regular production. The prices of zircon sand in China would keep going up.
Asian Metal: How do you see the zircon sand and zirconium oxychloride price trends in the first quarter of 2024?
Mr. Jiang：The prices of zircon sand would remain going up next year. First, international suppliers shortened supply to China in Q1 and intend to hold prices for Q1 2024 firm against Q4 2023, leading to the big price differences between international zircon sand 65%min and local ones. Under the tightening spot supply in China, Chinese zircon sand and zirconium oxychloride would go up in the first quarter.
Asian Metal: As the foundational raw material for metallurgy and chemical industry, zirconium oxychloride is widely used in the production of zirconium dioxide, zirconium carbonate, zirconium sulfate and zirconium nitrate etc. These materials are used in ceramic, glass, pigment, paper-making industries. Please briefly review the domestic and overseas demand in 2023 and which parts showed relatively solid demand?
Mr. Jiang: The demand in China reduced in 2023 compared with the regular annual level of 200,000t due to the lower operation rates from various consumption industries. Overseas clients who usually kept stocks for at least eight months' consumption, only kept stocks for around two months in 2023 due to the weak overseas market. Consequently, the export volume in 2023 decreased. Of course, there are still some industries that performed with stable demand in 2023. For example, the zirconium dioxide industry consumed zirconium oxychloride stably or even more due to the increased orders of zirconium dioxide from gem industry. Gem zirconium could replace some high-end glass from Southeast Asian due to better anti-corrosion performance. The anti-corrosion performance of high-end glass from Southeast Asia could maintain for half a year but that of gem zirconium could maintain 5-6 years. Additionally, as diesel vehicles such as trucks need to install facilities to control the diesel exhaust, the catalyst industry consumed more zirconium carbonate in 2023, promoting the zirconium oxychloride consumption to increase.
Asian Metal: How do you predict the price trend of zirconium oxychloride in the first half 2024? How about the demand in 2024?
Mr. Jiang: Stimulated by the continually increased prices of zircon sand and tight supply, the prices of zirconium oxychloride would definitely increase in Q1 of 2024. We predict that the international suppliers would lift zircon sand prices in Q2 2024, and the prices of zirconium oxychloride would also move up further in Q2. Despite the dim market, consumers hold minimized stocks of raw materials and products, and they would actively replenish stocks of raw materials before and after Chinese Spring Festival. Additionally, some titanium dioxide plants would use zirconium oxychloride directly to replace zirconium sulfate to reduce their production cost, so the demand from titanium dioxide plants would increase slightly in 2024. Considering the increasing demand from titanium dioxide and pigment industry and solid demand from zirconium dioxide industry, I predict the demand of zirconium oxychloride would increase in 2024 against last year.
Asian Metal: Does your company have new plans in 2024?
Mr. Jiang: First, we would continue to maintain the high quality and stable supply of zirconium oxychloride. Second, we have plan to build an intelligent kiln to produce high-purity zirconium dioxide.
