----Interview with Hanyu Wei
General Manager
Xinpu Titanium Metal Material Co.
Xinpu Titanium Metal Materials Co., Ltd.was established in 1998, headquartered in Qinghe County, Hebei Province, thecommercial hub of the Beijing-Hangzhou Grand Canal. Xinpu Titanium IS committedto the recovery, sorting, cleaning, processing and sales of titanium alloymaterials. The company covers an area of 50 acres, with an annual revenue ofnearly 200 million yuan, fixed assets of 100 million yuan and more than 100employees. The company has passed ISO 9001 quality management systemcertification, and has been awarded the honorary titles of national science andtechnology-based small and medium-sized enterprises, innovative small andmedium-sized enterprises, and specialized small and medium-sized enterprises.
Asian Metal: Hello Mr. Wei, welcome to the interview. Please briefly introduce your company.
Mr. Wei: Our company specializes in titanium metal materials—recycling, sorting, cleaning, smelting, production, and processing. With over thirty years of history, we have 10,000 tons of furnace charges, 2,000 tons of additives, 30,000 tons of titanium ingots, and 20,000 tons of titanium processing capacity. Through strict quality control and advanced production technology, our titanium alloy furnace charges and finished products enjoy a strong reputation in the market, trusted by customers. We focus on the R&D, production, and sales of titanium alloys, with steady growth in both finished products and furnace charges over the past decade. One of our main business segments is titanium alloy furnace charge products, which utilize a spectral sorter and self-built cleaning and sub-assembling production lines to ensure stable chemical composition. These products are widely used in ferrotitanium production and special steel smelting, enhancing the strength, corrosion resistance, and mechanical properties of steel at a competitive price. We produce about 1,000 tons monthly and have established long-term relationships with many ferrotitanium plants and special steel mills, providing customized additive solutions. Our core product, TC4 titanium sheet, holds around 60% of the civilian market share and is price-controlled. Despite a downturn in demand this year, our finished titanium alloy business grew by about 30%, with a production volume of 10,000 tons in 2023 and an expected 13,000 tons in 2024.
Asian Metal: Chinese titanium sponge market prices have continued to decrease since the second half of 2024. What do you think is the main reason?
Mr. Wei: There are four main reasons: Firstly, supply-demand imbalance: the supply of titanium sponge increased, but demand remained weak, leading to price drops. Many producers expanded their capacity by 30% in the first half of the year, but downstream demand didn’t increase. Secondly, fluctuations in raw material prices: as prices for titanium ore and magnesium ingots fell, production costs of titanium sponge decreased, affecting prices. Thirdly, soft demand: both domestic and international demand, especially export orders, weakened, reducing consumption of titanium sponge. Additionally, fewer new industrial projects suppressed market demand. Lastly, the overall weak economic situation: many businesses have adopted a wait-and-see attitude, leading to reduced purchasing willingness.
Asian Metal: How do you predict the titanium metal market in the first quarter of 2025?
Mr. Wei: Based on current market trends and analyses, we expect the titanium metal market to continue fluctuating at a low level in Q1 2025, with no significant rebound. Despite production cuts by some companies, supply remains sufficient, while demand, especially from end users, shows little improvement. Raw material prices remain high, maintaining production cost pressure, but the weak demand makes price increases unlikely. The overall economic environment is poor, further suppressing market demand. Thus, we predict that titanium sponge prices will hover around RMB45,000-48,000/t (USD 6,194-6,604/t) in Q1.
Asian Metal: With a certain lag in the production cycle of downstream metal products, how do you balance the cost of raw materials and sales prices?
Mr. Wei: To balance raw material costs and sales prices, we employ several strategies: First, production cost control: we monitor market fluctuations in titanium sponge and scrap prices and reduce costs through long-term contracts and bulk purchases. We also optimize production processes to improve efficiency and reduce costs. Second, inventory management: we align raw material inventory with market demand and production plans, using a pre-purchase, pre-sale, and pre-inventory strategy with partners to mitigate price fluctuations. Third, pricing strategy: we adjust prices flexibly based on raw material costs and market conditions to stay competitive. Fourth, customer relationships: we maintain close contact with customers to understand their needs and offer personalized solutions. Fifth, market forecasting: by analyzing market trends, we prepare strategies in advance to manage fluctuations and reduce their impact on operations.
Asian Metal: What do you expect the downstream demand for domestic titanium alloy and scrap products to be in 2024? Will there be a significant decline compared to last year?
Mr. Wei: We anticipate a 5% decline in downstream demand for titanium alloy and scrap products in 2024, primarily due to weak macroeconomic conditions. However, this decline is expected to be gradual, not drastic. Despite the overall economic downturn, the Federal Reserve's interest rate cuts and liquidity support in domestic policy should help stabilize demand. Moreover, while overall demand is weak, sectors like special steel and high-end applications in aviation, aerospace, and medical fields will see stable demand growth of around 10%. International demand remains weak, but with the easing of interest rates, overseas markets should gradually recover.
Asian Metal: Does your company plan to develop its export business? How do you plan to balance domestic and export sales?
Mr. Wei: Our export business currently operates through traders, and we’re focusing on maintaining relationships with existing customers and sales channels due to the uncertainty of the international situation. We follow a production-sales linkage strategy, aligning production with market demand. While we monitor international demand for titanium scrap and chips, our focus remains on serving the domestic market.
Asian Metal: What are your company’s future development plans and key products?
Mr. Wei: Our future plans focus on strengthening core products and expanding our portfolio. Firstly, we will continue to focus on titanium alloy sheets and furnace charge products, improving quality and efficiency to solidify our market leadership. Secondly, we’ll expand into other grades of titanium alloy to meet diverse customer needs, particularly for high-end furnace materials. Thirdly, sustainability is key; we will optimize production processes to minimize environmental impact, improve resource efficiency, and contribute to the development of titanium alloy as a sustainable material.
