----Interview with Haiguang Ou
Chairman
Foshan Weijun Nonferrous Metals Co.
Foshan Weijun Nonferrous Metals Co., Ltd. was established in 2000. The company has been awarded as a trustworthy unit by the Guangdong Provincial Administration for Industry and Commerce for 22 consecutive years. It mainly engages in business of nonferrous metals, chemical products, and rare earth mineral products. The company invested in the construction of Lianzhou New Energy Co., Ltd. in 2010, covering an area of 36,000 square meters. It mainly produces selenium powder, selenium dioxide, alloys for new energy battery, nano-selenium for agriculture, etc. The annual production capacity of selenium is 1,600t, including 600t of nano-selenium which is for agricultural use.
Asian Metal: Welcome Mr. Ou to participate in the interview by Asian Metal. Please briefly introduce your company's business and your experience in the industry.
Mr. Ou: Foshan Weijun Nonferrous Metals Co. was established in 2000 and is mainly engaged in business of nonferrous metals, chemical products, and rare earth mineral products. In 2010, we invested in the construction of Lianzhou New Energy Co., Ltd., which mainly produces selenium powder, selenium dioxide, alloys for new energy battery, nano-selenium for agriculture, etc. The annual selenium production capacity is 1,600t, including 600t of nano-selenium. Our selenium metal output in 2022 recorded around 650t. I have been engaged in the selenium industry for more than 20 years. At first we were mainly engaged in import and export trade. After the establishment of the factory in 2010, we were mainly engaged in the extended research of selenium powder, selenium dioxide, selenium industry for health care industry and nano-selenium for agriculture industry. In the past two years, our production of nano-selenium for agricultural use has maintained an annual growth rate of 20%, and our total consumption last year was about 380 tons.
Asian Metal: Please briefly introduce the current market of selenium products from the perspective of upstream supply and downstream application.
Mr. Ou: Currently, selenium is mainly used in electrolytic manganese, ceramic glass, new energy and agricultural fields. Among them, 45% is used in the electrolytic manganese industry, 25% is used in the ceramic glass and new energy industries, and 30% is used in the agricultural field. The application of selenium in agriculture is growing steadily. After the epidemic, people began to pay more attention to health and selenium-rich agricultural products have grown rapidly across the country. Selenium use in agriculture is expected to grow by more than 20% in 2023. There are currently nearly 38,000 acres of selenium-rich land, and the selenium content in the soil is generally greater than 0.4 mg/kg. The current global demand for nano-selenium for agricultural use is about 600 metal tons a year, of which China accounts for about 260 metal tons.
Asian Metal: As the main application field of selenium dioxide, why has the demand for selenium dioxide in the electrolytic manganese industry declined year after year in the past three years?
Mr. Ou: The main reason why the proportion of selenium in the manganese industry has declined for three consecutive years is the sluggish demand in the steel and stainless steel industries. The manganese industry reduced production to support prices. According to our understanding, the current annual output of electrolytic manganese is about 800,000 tons, compared with 1.3 million tons three years ago, which is declining at a rate of 15-20% every year. Therefore, the consumption of selenium dioxide in the electrolytic manganese industry has also dropped from the original 56% to the present 46%. Based on the current projections of manganese production, we estimate that the consumption of selenium dioxide in the electrolytic manganese industry will be about 800t in 2023.
Asian Metal: What do you think are the main challenges and opportunities that the selenium industry are facing now?
Mr. Ou: Selenium industry faces both challenges and opportunities both now and in the future. The current market is weak with scarce deals and reduced purchase volumes, all of which are the reasons for the dim selenium market. However, in the long run, the opportunities are obvious. For instance, RMB depreciation and the increasing application of selenium in the field of new energy are beneficial to selenium; Thin-film solar cells based on antimony selenide have good conversion efficiency, simple process, low toxicity and low cost. Besides, the application of selenium in lithium-selenium batteries and that in agriculture are also the directions of industry development in the future.
Asian Metal: Why did the prices kept rising strongly since the beginning of 2023 after seeing a sluggish market in 2022?
Mr. Ou: The mainstream prices of selenium dioxide in mid-September was around RMB130/kg, a month-on-month increase of about 35%. This is mainly because the prices of selenium dioxide remained low in the past few years. Taking last year as an example, the mainstream prices of selenium dioxide in 2022 fluctuated at prices below RMB100/kg. In addition, with the depreciation of the RMB, the expanding use of selenium especially in globally new energy and agriculture industries, and bullish attitudes of investors, the selenium dioxide market witnessed continuous price increase in the first half of 2023. Besides, the increase in labor and auxiliary material costs has also led to an increase in selenium dioxide production costs.
Asian Metal: Do you think the prices would continue to rise by the end of the year?
Mr. Ou: As the demand for selenium dioxide continues to recover, the supply of crude selenium is tight and the prices continues to rise, we recently began to raise prices. It is expected that the mainstream prices of selenium dioxide in China might climb to around RMB220/kg before the end of the year.
Asian Metal: Which industry would contribute to future demand growth?
Mr. Ou: The future growth point of selenium consumption will be mainly concentrated in the fields of new energy and agriculture. We are more optimistic about the agricultural selenium market. We predict that with the recent mandatory addition of agricultural nano-selenium to China's six major feed mills, the demand for agricultural nano-selenium will increase at a yearly rate of 15%-20% in the next three years.
Asian Metal: What's your company's development plan for the next year?
Mr. Ou: Our company will mainly invest in the new South China Selenium-rich Industrial Park for Functional Agriculture in the next year. The industrial park includes the Selenium Science Museum, the Selenium Fertilizer Research Institute, the Selenium and Natural Agriculture Application Training Base, and the Plant Protein Selenium Application Research Institute. All the institutes would help expand the application of selenium in the field of functional agriculture.
Asian Metal: We wish you and your company flourishing business!
