Shanghai Meiyan: Integrating production with trade to resist risks in magnesium ingot market
----Interview with Zhang Junchao, general manager of Shanghai Meiyan Metal Materials Co., Ltd.
Shanghai Meiyan Metal Materials Co., Ltd. is not only an international and diversified manufacturing company, but also a business service provider. The company focuses on the R&D of technologies used to produce new materials, technical services, trading of metal materials as well as the investment. Technical services provided by the company include the R&D of light alloy materials, introduction and promotion of application technologies, integrated solutions to new material projects and related financial services. Trades which the company is engaged in include the imp & exp of high-end metal materials as well as alloys. Fields in which the company makes investments include business, logistics, supply chain, property, project and financing.
Asian Metal: Hello, Mr. Zhang. Thank you for accepting the interview. Could you please give us a brief introduction of your main businesses?
Zhang: It is my pleasure to be interviewed by Asian Metal.
With the circular industrial chain of magnesium metal, magnesium alloy and other magnesium products, which is formed by investing and developing magnesium resources in Northeast China, Xinjiang and other regions by the group, Shanghai Meiyan focuses on the R&D of technologies used to produce new materials, technical services, trading of metal materials as well as the investment. Technical services provided by the company include the R&D of light alloy materials, introduction and promotion of application technologies, integrated solutions to new material projects and related financial services. Trades which the company is engaged in include the imp & exp of high-end metal materials as well as alloys. Fields in which the company makes investments include business, logistics, supply chain, property, project and financing.
Asian Metal: As a rising star in the magnesium industry, your company has witnessed a substantial increase in trading volumes of magnesium products in 2016. As for domestic and overseas businesses, which does your company pay emphasis on? And how does your company deal with those businesses?
Zhang: We have done a lot of work on magnesium trade this year and the group has also done a lot of work on the layout of magnesium business. Therefore, we have made some achievements.
Market participants believe that in the development of emerging strategic industries, magnesium is regarded as a promising material in the light alloy market and will play a very important role in many areas, such as lightweight vehicles, new energy materials, environmental protection, consumer electronics, marine engineering and aerospace.
We also hope for the healthy development of the magnesium industry in term of our business layout. Meanwhile, we have constantly strived to improve ourselves. Domestic and overseas businesses are equally important to us.
Asian Metal: Many traders have suffered a lot this year with magnesium ingot prices continuing to rise. How does your company deal with the rising price and guarantee reasonable profit margins?
Zhang: Prices for magnesium ingot soared this year.
As far as I know, some traders indeed suffered setbacks this year. It is uneasy for traders to do business in the magnesium industry which in my view is a special industry as there are many big risks which traders who just make trades can’t withstand.
We are able to ensure reasonable profit margins because we have our own production base. We not only produce magnesium products, but also trade those products, which ensures stability and improves our ability to resist risks at the same time.
Asian Metal: In November, magnesium prices which lacked the momentum to go up initially dip slightly at the moment. What do you think are the factors that affect the price? How did your company deal with this situation?
Zhang: It is normal for prices to go up and down. In my opinion, fluctuations in magnesium prices this year could mainly be attributed to human factors.
The layout of our company makes it easy for us to cope with changes in market. As we have production bases, we can guarantee the stability of trades regardless of market conditions.
Asian Metal: What do you think about the price trend of magnesium ingot in China before the end of the year? Does your company have any plan to stock the material?
Zhang: I think magnesium prices will move up steadily. It is an opportunity to stockpile the material every time prices edge down.
Asian Metal: What do you think of the magnesium ingot market trend in Q1 of 2017?
Zhang: In my view, prices for the material will hold relatively stable, which reflects that the price of a commodity is ultimately be determined by market demand.
Asian Metal: Thanks again for your time. Wish your company a bright future?
