----Interview with Liu Qiang
Vice General Manager
Bengbu Zhongheng New Material Tech Co., Ltd
Established in November 2007, Bengbu Zhongheng New Material Technology Co., Ltd. is located in China Glass New Material Science and Technology Industrial Park, a national high-tech industrialization base in Longzihu District, Bengbu City, Anhui Province. It belongs to Kaisheng Group, a subsidiary of China Building Materials Group Co., Ltd., which is one of the world's top 500 enterprises.
Asian Metal: Welcome to join our interview Mr. Liu, please introduce your company first.
Mr. Liu: Established in November 2007, Bengbu Zhongheng New Material Technology Co., Ltd. is located in China Glass New Material Science and Technology Industrial Park, a national high-tech industrialization base in Longzihu District, Bengbu City, Anhui Province. It belongs to Kaisheng Group, a subsidiary of China Building Materials Group Co., Ltd., one of the world's top 500 enterprises. It is also a subsidiary wholly-owned by Kaisheng Technology Co., Ltd, which is a A-share listed company. We mainly produce fused zirconia, spherical silicon powder, spherical alumina, ultra-fine zirconia, high-activity zirconia, etc., which are widely used in refractory and grinding materials, ceramic color glaze, advanced ceramics, electronic information, new energy vehicles, biomedical, aerospace and other fields. We’re the world's largest producer of fused zirconia, and our products are popular in China and are exported to Japan, South Korea, Germany and European countries.
Asian Metal: What are the company's product research and development advantages?
Mr. Liu: Relying on the stated owned scientific research key laboratory of China that is Chinese Building Materials Glass New Materials General Institute, we carry out the research and large-scale application development of inorganic non-metallic new materials based on the layout of the national strategic security and global forefront technology and carry out the research and large-scale application development of inorganic non-metallic new materials. We adopt the "ultra-fine and high-purity fused zirconia large-scaled preparation" technique with independent intellectual property rights to produce fused zirconia products with purity of 99.4%min. With low impurity content, narrow particle size distribution, good reactivity etc., our products can be applied to multi-channel application scenarios and meet the diverse needs of customers from in the field of ceramic glaze, high-end refractory materials and foam ceramic filters industries. We have been cooperating with well-known brands and the world's top 500 enterprises and secure bulk supply for them.
Asian Metal: Your company is mainly engaged in fused zirconia and other related products. Affected by the downturn in the macro-environment this year, the overall demand for zirconia-related products in domestic market has decreased. Could you please review the demand for fused zirconia in the Chinese market in the past few quarters? How does demand perform compared to last year?
Mr. Liu: Since the beginning of the year, affected by the downturn in the real estate market, the ceramic industry glaze and color demand for zirconium products is insufficient, and sales orders in January and February are reduced by 20% compared with previous years, and the prices of zirconium products are lower than last year to varying degrees. After March the demand for zirconia, zirconium silicate and other products gradually recovered compared to the same period last year. The sales performance in Q3 decreased against last Q3 except the demand from zirconium sponge industry. In the past, our downstream is mainly ceramic color industry, and now the demand from ceramic color industry is shrinking, and the demand from ceramic and refractory plants shrank over 20%. So the company actively expands the application of sponge zirconium and ceramic filters, friction materials and advanced ceramics materials. We have been engaged in new areas in bulk and have obtained new profit growth point.
Asian Metal: Zircon sand is one of the main raw materials of fused zirconia. At present, the price difference between international zircon sand and domestic zircon sand is more than RMB1,000/t. Will you use zircon sand 66%min produced by domestic dressing plants?
Mr. Liu: The fused zirconia production principle is to remove silicon, if the impurities, such as alumina, titanium, are not removed, the ceramic color will be affected. The quality of zircon sand in domestic market is unstable, while the quality of imported zircon sand, despite minor fluctuation in impurities, is stable on the whole. We use domestic zircon sand as a supplement when the international supply turns tight. After all, the zircon ore used by domestic producers is also imported from abroad. Besides, we use different grades of zirconium sand according to different customer needs. To further explain, the international zircon mine giants such as ILUKA, RBM TRONOX monopolize most of the zircon resources worldwide, and they concentrate into primary zircon sand through advanced mineral processing technique and quality control. Consequently, the quality maintains relatively stable. Additionally, they have pricing power and could maintain high sales prices. The zircon sand 65%min concentrated by Chinese dressing plants through intermediate and tailing ore originated from Australia, South Africa, America, South Asia, Southeast Asia etc., is short of fine quality control, and the domestic technique also remains unstable with low labor cost. Consequently, the zircon sand quality is unstable and prices are relatively low. To be more specific, the impurities of Fe2O3, TiO2 and Al2O3 in imported zircon sand are no more than 0.08%, 0.15%, and 0.30%, while those of domestic zircon sand range around 0.05-0.2%, 0.1-0.3% and 0.1-1.0%.
Asian Metal: As one of the major domestic consumers of international zircon sand, what do you think of the export price trend of international zircon sand 66%min to China in the fourth quarter?
Mr. Liu: For Q4, the mainstream international zirconium sand prices are not easy to decline. The main point is about the weak demand instead of price decline. Overseas suppliers think that the demand would hardly recover significantly after the price fall, I agree with that but I also think it is not easy to rise either. So the prices in the fourth quarter would maintain stable probably. Assuming that it falls, it would not fall sharply, maybe by around $100/t at most.
Asian Metal: What do you think of the demand and price trend of fused zirconium in the fourth quarter or early next year? In what areas is the fused zirconium demand expected to grow?
Mr. Liu: With the gradual saturation of photovoltaic capacity, the demand for fused zirconium has also slowed down, but the demand especially from foreign mainstream refractory and ceramic enterprises are relatively stable. At the same time, there are also new growth points such as the solid-state battery industry in the zirconium chemical industry. Speaking of our own factory, the demand is stable, and we are looking forward to seeing the demand growth from zirconium chemical industry and new energy chemical industry. The fused zirconia demand in Q3 from ceramic industry turned sluggish under the fierce competition, and the major plants desperately to clear stocks by lowering prices. The demand in Q4 would remain low because of the traditional off-season, and I think prices of fused zirconia would slip in Q4.
Asian Metal: Do you have any new projects or plans in the future?
Mr. Liu: We're committed to reinforcing in the integration of zirconium and silicon-based (synthetic quartz, high-purity quartz, quartz crucible) resources and making right market foresight. We will also continue to extend to the upstream raw materials mining and downstream products finishing fields and enhance our company's coverage of the whole industrial chain and the capability to cope with market risks.
