----Interview with Benzhong Yao
Genaral manager
Tongren Mercury Experiment Fine Chemical Co., Ltd.
Tongren Mercury Experiment Fine Chemical Co., Ltd. was established in 2020, focusing on the deep processing of mercury metal and producing a variety of fine chemicals such as mercuric chloride, mercuric nitrate, and mercuric oxide. Last year, the company produced approximately 10 tons of mercury metal equivalent, and this year, with 10 tons already produced, the output is expected to remain consistent with last year.
Asian Metal: Hello, Mr. Yao, welcome to this interview with Asian Metal. To start, could you briefly introduce your company and its business?
Mr. Yao: Tongren Mercury Experiment Fine Chemical Co., Ltd. is located in Gaolouping Township, Wanshan District, Tongren City, Guizhou Province. Established in 2020, our company specializes in the deep processing of mercury metal and is committed to producing a range of downstream products, including mercuric chloride, mercuric sub-chloride, mercuric nitrate, mercuric oxide, mercuric sulfate, mercurous sulfate, mercurous nitrate, potassium mercuric sulfide, potassium mercuric nitrate, mercuric iodide, and cinnabar crafts, among others. Last year, we successfully met our production target of 50 tons of mercury metal equivalent. So far this year, we’ve produced 10 tons, and we expect our total output to be similar to last year.
Asian Metal: What do you believe are the core competitive advantages of your company in the production of mercury metal?
Mr. Yao: To effectively reduce production costs, we have adopted a strategy of forward purchasing 99.9% pure mercury metal at a reserved, lower price. Many upstream suppliers are currently facing financial pressure and require advance payments. In response, we agree to pay in advance, which provides financial support to these suppliers. In return, they offer us favorable conditions, including a price lower than the market rate, once they complete production. This approach not only eases the financial burden on our suppliers but also ensures we can secure high-quality raw materials at a more competitive price. As a result, it strengthens our cost advantage and market position in mercury metal processing. Going forward, we will continue to closely monitor market dynamics and adjust our procurement strategies accordingly to ensure the company’s steady development.
Asian Metal: What is the current demand distribution for mercury metal in its various major application fields?
Mr. Yao: In the Chinese market, the application of mercury metal is broad, with some areas seeing higher demand. Mercuric chloride, used as a mercury catalyst, accounts for more than 50% of the market share, followed closely by cinnabar crafts, which represent around 40%. Emerging or niche applications, such as small mercury salts, pharmaceuticals, and environmental wastewater treatment, make up less than 10% of the total demand for mercury metal.
Asian Metal: In 2024, the market has generally reflected a tight supply of mercury metal raw materials. What do you think are the main reasons for this? And what measures has your company taken to ensure a stable supply of raw materials?
Mr. Yao: There are several factors contributing to the tight supply of mercury metal. Firstly, since 2017, the Chinese government has implemented a series of strict measures to mitigate mercury pollution, including halting the issuance of new mercury exploration licenses and mining permits and gradually phasing out mercury-containing products. As a result, the number of operational mercury mines has significantly decreased, with many unable to continue mining once their licenses expire. Secondly, since the beginning of 2022, the rise of short-video platforms like TikTok has popularized cinnabar live-streaming, driving a boom in the cinnabar crafts market and causing a sharp increase in demand for mercury metal raw materials. Furthermore, companies are facing rising management costs, particularly in environmental protection, as they invest heavily to meet increasingly stringent standards. The industry has recently seen a significant upgrade in exhaust gas filtration systems, with the level of required environmental protection rising from level three to level twelve. This has made compliance more costly, with equipment upgrades costing up to RMB 400,000 (USD 57,040) per unit. With three such devices, we now invest up to RMB 1.2 million (USD 171,120) every three months just for maintenance and updates. To counter these challenges, we’ve implemented active measures, such as securing forward contracts for 99.9% pure mercury metal to lock in prices and relieve cost pressures.
Asian Metal: From the beginning of 2023 until now, the price of mercury metal has continued to rise, from RMB 500,000/ton (USD 71,300/ton) to around RMB 1,360,000/ton (USD 189,170/ton). What do you believe are the key factors behind this price surge?
Mr. Yao: The primary factors driving the price increase are the supply tightness mentioned earlier, as well as rising demand for cinnabar. Additionally, the price of mercury metal is often linked to the price of gold, as both are precious metals. When gold prices rise, mercury metal prices tend to follow suit, which has contributed to the surge.
Asian Metal: As environmental policies become stricter, some industries are considering reducing or eliminating the use of mercury metal. Do you think this trend will lead to a significant decline in the overall demand for mercury metal?
Mr. Yao: It is unlikely that the use of mercury metal will be completely phased out in the next one to two years. While environmental regulations are becoming more stringent, mercury still plays a vital role in certain high-end applications, especially in the medical field. Many developed countries have advanced requirements for the refinement of mercury, and China still relies on importing high-end medical products containing mercury metal from Europe, the U.S., Japan, and South Korea. This highlights the continued need for mercury metal in critical industries. If we were to eliminate it entirely, we would face significant costs importing these products from abroad.
Asian Metal: How do you view the demand prospects for mercury metal in the next two years?
Mr. Yao: The two main applications for mercury metal are mercury catalysts and cinnabar, and their demand is closely tied to economic development. In the case of mercury catalysts, they are crucial in the PVC industry. However, due to the ongoing challenges in the real estate market, we expect demand for PVC, and therefore mercury catalysts, to decline next year. Additionally, high mercury prices have led many producers of mercury catalysts to operate at a loss, which may further reduce production. On the other hand, we remain optimistic about the demand for cinnabar. Since cinnabar demand is closely linked to the national economy, and we are confident in the economic outlook for next year, we expect cinnabar demand to remain stable without significant decline.
Asian Metal: What is your prediction for the price trend of mercury metal next year?
Mr. Yao: I expect a slight decline in mercury metal prices next year. The reason for this is that fewer mercury catalysts will be produced, reducing mercury demand and putting downward pressure on prices. Furthermore, it seems unlikely that prices will increase much more in the long term, as they have already reached a plateau in the range of RMB 1,300,000-1,400,000/ton (USD 185,381-199,641/ton). Therefore, I do not anticipate significant price increases in the future.
Asian Metal: Thank you for your insightful sharing, Mr. Yao. We wish your company continued success and look forward to seeing your contributions to the industry in the future.
