----Interview with Jinbo Liu
General Manager
Shanghai Nickelxing Metal Materials Co., Ltd.
Founded in April 2020, Shanghai Nickelxing Metal Materials Co., Ltd. acts as a global trading company engaged in trading of various metal products including but not limit to rare metals, pure metals (molybdenum, tungsten, nickel, titanium, chromium, cobalt, tantalum, niobium, etc.), alloys (ferroalloy, superalloy), and especially rare metals scraps (molybdenum scrap, tungsten scrap, nickel scrap and alloy scrap).
Asian Metal: Hi Mr. Liu. Welcome to the interview. Please briefly introduce your company first.
Mr. Liu: Shanghai Nickelxing Metal Materials Co., Ltd. is registered in Baoshan District, Shanghai, and has offices and warehouses in Xingtai, Foshan and Dongguan. The company specializes in the recycling of molybdenum scrap, tungsten scrap, nickel scrap, alloy scrap and other rare metals. Starting from individual workshops, after more than 30 years of development and growth, the current annual sales are closed to 1,000 tons of molybdenum scrap, 800 tons of tungsten scrap, and 2,000 tons of nickel scrap. In the scrap industry, we occupy an absolute leading advantage. We maintained long-term cooperative relations with well-known producers and end users both at home and abroad.
Asian Metal: How much does molybdenum scrap account for in the entire molybdenum industry chain? How is your view of its outlook?
Mr. Liu: In the molybdenum industry chain, ferromolybdenum accounts for about 80% of the market share, molybdenum chemical industry and molybdenum deep processing account for about 15%, and molybdenum scrap accounts for about 5%. Through the efficient operation of us and peers, this 5% share enables the recycling of molybdenum elements in the entire industry chain to be realized, so that the molybdenum industry chain forms a closed loop. We firmly believe that with the depletion of molybdenum mining, the importance of molybdenum recycling will become increasingly prominent, and it is expected that this proportion will expand to about 10% in the next five years. Molybdenum scrap has a broad market in the world, because molybdenum is a strategic metal and widely valued all over the world. Especially when the prices of raw materials becomes more and more expensive, people urgently need to turn to similar products with cheap and good quality. As a result, pure molybdenum scrap will be more and more widely used. As I mentioned above, the market share is expected to double in the next five years.
Asian Metal: Where is the most concentrated area of molybdenum scrap industry in China?
Mr. Liu: The molybdenum scrap industry is first concentrated in the most concentrated areas of molybdenum metal production, such as Luoyang and Xi 'an,which, from the output point of view, account for about 90% of the total volume; The second concentrated area is close to the consumption area of molybdenum metal products, namely the Yangtze River Delta and the Pearl River Delta, etc. From the consumption point of view, The both areas' consumption also accounts for about 90% of the total volume; The third is mainly concentrated in some scraps distribution centers, such as Qinghe, Gucheng, Dainan, Suzhou, Dongguan and Foshan. These areas, from the point of view of trade volume, almost accounted for all the proportion. This is the main reason why we chose to set up offices in Qinghe, Foshan and Dongguan.
Asian Metal: How to price molybdenum scrap in the Chinese market at present, and how to evaluate the current pricing model?
Mr. Liu: There are a variety of molybdenum scrap products, including molybdenum metal scrap, chemical powder scrap, catalysts scrap, etc. It is not a standard product, so there is no specific indicator to determine the price. The prices are usually based on the appearance of shape, content, state and other factors and influenced by the supply and demand. Taking molybdenum cutting scrap as the example, we refer to the prices of pure molybdenum products such as steel grade molybdenum bar, and also compare with ferromolybdenum prices to calculate the metal price of molybdenum. Meanwhile, we have to consider the market supply and demand. Our downstream customers are mainly stainless steel plants, high temperature plants, metallurgical foundries. For example, the current prices of molybdenum cutting scrap 99%min can generally be determined by referring to 95% of the finished product prices of steel grade molybdenum bar 99%min. The main competitive replacement of pure metal molybdenum scrap is steel grade molybdenum bar. In order to reduce cost and increase efficiency, downstream enterprises will use molybdenum scrap to replace steel grade molybdenum bar. However, if the molybdenum scrap prices remain too high, there is also the risk of reverse substitution by steel grade molybdenum bars. As for competing alternatives, we haven't found them yet.
Asian Metal: Molybdenum prices rose rapidly at the beginning of the first quarter, and then fell rapidly at the end of the first quarter. The market witnessed slow price increase in the second quarter. What do you think are the main reasons for the price trend?
Mr. Liu: Due to the recovery of downstream demand at the beginning of the year and the tight supply of raw materials, the mainstream miners jointly pushed up molybdenum concentrate prices, resulting in molybdenum prices skyrocketing early this year. In late Q1, downstream demand failed to support high prices and end consumers kept delaying replenishment, ferromolybdenum producers faced serious cost pressure, resulting in the sharp price fall. After the slump in the first quarter, the prices started to rebound in Q2. However, as the recovery of the downstream industry was slow, the prices only recovered steadily, and there was no new round of skyrocketing market.
Asian Metal: Molybdenum prices began to plummet again at the end of the third quarter. What do you think is the main reason? How did you deal with it during the period?
Mr. Liu: Due to the continued downturn in end-user demand at home and abroad, most suppliers had to cut prices to promote sale, molybdenum prices had a new slump in the market. This year's market changed greatly, most market participants generally faced heavy cost pressure and even losses. We also experienced the great pressure but the impact was relatively less severe as our marketing strategy was to purchase according to orders and reduce inventory as much as possible during the period.
Asian Metal: What is your expectation for molybdenum price trend by the end of 2023?
Mr. Liu: Molybdenum market changes very fast, so it is difficult to predict a long-term price trend. However, according to the demand situation of current steel mills, the market prices would remain in a relatively stable range. We are cautiously optimistic about the market in Q4. At present, due to the decline in the downstream plant operating rate, the supply of molybdenum scrap has been greatly reduced. However, discouraged by the weak downstream demand, the prices has not recovered significantly. Taking the continued weak demand into account , it is expected that the prices of molybdenum scrap would stabilize or decrease slightly in the rest period of the year.
Asian Metal: What is your company's future plan?
Mr. Liu: There are many types of molybdenum scrap, and the corresponding products need to be selected according to different requirements of our clients. For example, pure molybdenum products include molybdenum block, molybdenum sheet, molybdenum wire and so on. Some high-end products must use first grade molybdenum material, and some ordinary products only request general grade of molybdenum raw materials. So our clients prefer to choose more cost-effective molybdenum raw materials, such as molybdenum wire, molybdenum sheet, molybdenum chips and so on. What we have to do is to voice for the molybdenum scrap market and let everyone know that this industry includes a lot of categories of products and there is no unified standard for all the categories. Our strategic direction is to make the recovery and reuse of molybdenum scrap as standardized as possible. We need to constantly explore the requirements and demand of the market and our clients by in-depth communication, and finally provided best services or plans for our clients in domestic market and even abroad. Although there are strict restrictions on the import of molybdenum scrap, the export is not affected. The international market environment is changing, so we always pay attention to policy changes and strive to have the opportunity to provide molybdenum metal products to overseas customers.
Asian Metal: Thank you for your sharing and we wish Nickelxing Metal business better development and prosperity.
Mr. Liu: We would like to thank Asian Metal for the professional market information. Let us work together for the better future.
