Magnesium alloy market suffer hit from COVID-19 in Q2
----Interview with Mu Jinyao
General Manager
Tianjin Dongyi Magnesium Products Co., Ltd.
- Tianjin Dongyi Magnesium Products Co., Ltd. is a subsidiary corporation of Shanxi Dongyi Group Magnesium Business Division. The cooperation is mainly engaged in R&D, production and sales of magnesium alloy material and products. In addition, Dongyi also involves extrusion, die casting technology and all kinds of magnesium alloy products.
- Asian Metal: Thanks for accepting our interview. Please introduce your company briefly.
- Mr. Luo: The Sigma Group, founded in 1978, mainly focuses on trading of secondary aluminum alloy, zinc alloy and scrap metals. It has eight plants (including plants under construction in Binzhou and Gongyi) in China with an annual production capacity of more than 1 million tons. In 1996, the "SIGMA" brand was registered in LME, and Sigma became the first Chinese secondary aluminum alloy producer to trade futures contract on the LME.
- Asian Metal: Mr. Mu, thanks for taking the interview by Asian Metal. Please introduce your business briefly.
- Mr. Mu: Tianjin Dongyi Magnesium Products Co., Ltd. is a subsidiary corporation of Shanxi Dongyi Group Magnesium Business Division. The cooperation is mainly engaged in R&D, production and sales of magnesium alloy material and products. In addition, Dongyi also involves extrusion, die casting technology and all kinds of magnesium alloy products.
- Asian Metal: Dongyi belongs to a whole industrial chain production enterprise, please introduce your magnesium production distribution.
- Mr. Mu: Donyi Xiaoyi Magnesium devotes to research and development of new original magnesium alloy materials, from dolomites mining, pure magnesium ingot and all kinds of magnesium alloy products to magnesium alloy extrusion and die casting material. Tianjin plant is a production base for magnesium alloy products and mainly deals with extrusion and die casting material.
- As for our clients, most of them distribute in North America, Australia, South Korea, Japan, New Zealand, Germany, Vietnam and so on. Our domestic clients are mainly from 3C and all kinds of extrusion industries.
- Asian Metal: In Sino-US trade, whether Dongyi’s export for magnesium die casting, extruded parts, sacrificial anode and other related products to USA was affected or not? How does your company respond to the challenge?
- Mr. Mu: Most of economies’ GDP would decrease by 1% to 4.5% during the trading war. We are also affected on adding tariffs. Given this situation, we cooperate with foreign marketing team to minimize the loss on the high duty extruded profiles. In addition, we also consider expanding the sales to low-tax regions and Chinese domestic market to reduce the loss caused by the impact. Meanwhile, we improve products’ quality and provide better service to our clients.
- Asian Metal: From the beginning of 2020, the coronavirus broke out and extended to the global market very soon. Does your company suffer in the production and marketing? What’s about your opinion on the impact caused by virus to magnesium industry?
- Mr. Mu: Of course, we also suffer in the coronavirus. From the sales part, our sales decreased by 45% in Q1 of 2020. Actually, our plant was in suspension state in whole February, meanwhile, the production volume just resumes slowly in March and the volume predicts to be about 50% up till late March. Most downstream consumers in Chinese domestic market also suffered the situation, so there is no problem in delivery. Nevertheless, the situation in the foreign market is totally different, many orders in the foreign market have been postponed caused by our suspension for the production and our deals piled up. According to the situation, our foreign plants assist to finish some urgent orders; on the other hand, we active in communicating with clients and know consumers’ exact requirements well. We already got clients’ understanding and support. As for clients’ urgent orders, we arrange airfreight to deal with it, relieve buyers’ delivery pressure and guarantee clients’ acceptance. With the continuous spreading of the epidemic in various regions abroad, we will adjust the products’ structure according to the market trend and actively deal with all kinds of problem to meet in the coming months.
- Asian Metal: What’s your anticipation for magnesium ingot prices in 2020? How does magnesium ingot to influence the prices trend for magnesium alloy and related downstream products?
- Mr. Mu: Actually, magnesium ingot is the major production cost for magnesium alloy. After the strong impact for magnesium ingot prices in late 2018 and early 2019, market competition for magnesium alloy decreased. In addition, clients decreased their interests in promoting new products of magnesium alloy. According to the past years’ market trend, we anticipate prices for magnesium alloy would hover at the current price level and there is little room for the prices to fluctuate.
- Asian Metal: How do you think about the market demand for magnesium alloy extrusion products in 2020? Are there any growth points to be seen?
- Mr. Mu: Currently, our magnesium alloy extrusion products made by Tianjin are mainly focused on 3C products, all kinds of tubes and high strength special-shaped materials. We believe the development and application for magnesium alloy will keep rising supported by clients’ rising requirements for lightweight.
- Asian Metal: What’s about your plan on magnesium products’ production and marketing?
- Mr. Mu: We will maintain the export volume and guarantee the demand for magnesium products in the foreign market, cooperate with customers in the development of new products actively and expand market for magnesium alloy extrusion and die casting material in Chinese domestic market and foreign markets. In addition, we will keep high production quality, increase magnesium alloy products’ marketing shares and develop new products. What’s more, we also hope that our peers in magnesium industry can cooperate with each other to create some classic stories.
- Asian Metal: Thanks Mr. Mu accepting Asian Metal’s interview. We wish Dongyi Magnesium a more prosperous future in 2019!
- Mr. Mu: Thanks for your attention to Dongyi Magnesium. Let's work together and look forward to a better tomorrow. In addition, we also expect that Asian Metal sticks to the principle of objectiveness and timeliness in providing clients with better information about the magnesium market.
