Supporting chorme ore market to face new opportunity
----Interview with Isilay Ocal
General Manager
Sbm Danışmanlık Ve Eğitim Hizmetleri Ltd.
- Asian Metal: Thank you for taking time to have an interview with Asian Metal. Please introduce your company and its main business.
- My company, SBM is a consulting firm dealing with chrome ore deals mainly.
SBM acts as an intermediary between Turkish chrome ore producers or exporters and Chinese buyers.
- Asian Metal: Comparing to chrome ore origin from other countries, what do you think are the advantages for Turkish chrome ore?
- Main advantage is quality. And Turkish chrome ore is a perfect fit. Turkish chrome ore has low content of Phosphorus, high content of Nickel, high content of Cr/Fe, low content of Aluminum, and low content of energy consumption. Besides, operational advantages are on time deliveries, stock holding strategy, professional ops team and mainly mutual trust along with goodwill among both nations’ companies that has been built in years.
- Asian Metal: According to Chinese customs, China imported 8,700,397t of chrome ore from January to August in 2017. 695,100t of them came from Turkey, taking account of 7.99% and raking the second place. What is your opinion on the figures? Do you think the demand from Chinese market for Turkish chrome ore will see increase?
- Especially last 8 years, there had been tactically wrong decisions of both Turkish and Chinese companies which resulted in lower share of Turkish ore in Chinese imports. I think both Chinese and Turkish companies did not properly take into account the market realities and fast changing conjuncture.
- In general, Chinese companies skipped the importance of Turkish ore in the long run and the benefits that lie in the use of Turkish ore and in supporting Turkish ore producers, which result in that Turkish companies have to deal with the unbalanced and fragile market. Therefore talks between parties were mostly unorganized and aimless where arguments concentrated on the matters of price struggles other than real importance of cooperation without avoiding the confusion of trade issues.
- The market information on stainless in late years is giving the impression as the secondary figure on raw material and end product prices. It is determining factors are disregarded.
- Asian Metal: Zimbabwean is the third largest exporter for Chinese chrome ore market. However, minster of Mining Development of Zimbabwe recently disclosed that Zimbabwe may ban from exporting chrome ore to support local chrome ore washing plants. What do you think is the impact on Turkish chrome ore?
- I think the enthusiasm of production hardly rely on desperate needs and speculating intermediators but the economic incentive to have common interest to work together and to develop the future cooperation together.
- The case that Zimbabwe may ban from exporting chrome ore to support local chrome ore washing plants, may be a chance for Turkish producers to have a direct incentive in the promise that the deficit in quantity of China imports would be supplied by themselves as a reliable partner.
- Also it may be a good chance for both parties to emphasis complicated interest of Chinese and Turkish companies and detachments where no objective causes of conflict exists.
- Asian Metal: From your point of view, what are the challenges for Turkish chrome ore in the long term?
- China is the main chrome ore buyer so other than challenges, what I would like to suggest is to concentrate on Chinese importers’ interference. I would suggest Chinese buyers to preserve a cool temper and open mind about the Turkish ore prices and think more deeply about product diversity.
- Today, almost all over the world there seems to be the misery of economic depression and political uncertainty however the weak presence of Turkish ore in China is a risk in development future market targets of China. I do not mean this as an empty gesture, what I mean is, supporting Turkish ore producers, Chinese companies will also be the supporters of Chinese end product producers acting in favor.
- Supporting Turkish ore producers will give a chance to China to deal with the though swings of options easier and avoid the risks of conflict of interest on fundamental factors that influence the market.
- If Turkish ore ratio in China imports becomes negligible then in the close future, unstable market conditions may leave bigger unsolved issues in industrial development where China has gained ground.
- Asian Metal: The market for chrome ore hit bottom in June. After witnessing a slight recovery, the market is quiet with limited transaction volume now. How is your company cope with this situation?
- I hardly underestimate the reality of conjuncture and the importance of raw material therefore I don’t feel optimistic or pessimistic according to daily issues.
- The need for raw material is increasing and will be more and more crucial. I think coming days to fight for the control of the price will not be main issue but the supply. Therefore the price fluctuation will diminish.
- Asian Metal: What is your outlook for Turkish chrome ore market?
- I believe Turkish ore’s key role will be remembered. Needs of trade should derive the advantage and the reality what may be realized is that if supported by tactful strategy, instead of complaining about prices mainly, either high or low, and supporting the production of Turkish ore is for the advantage of both Chinese and Turkish companies.
