----Interview with Yongpeng Xue
General Manager
Taigu Shengde Nonferrous Metal Co.
Taigu Shengde Nonferrous Metal Co. was established in January 2006 (formerly known as "Taigu Hengsheng Smelting Industry and Trade Co.", founded in May 2000 and later restructured into Shengde Company), which is a professional producer of bismuth metal. The company is striving to develop a small local enterprise into a first-class enterprise with standard management, flexible mechanism, world-leading technology and great reputation in the global bismuth industry by taking the concept of "Great attention to people, management, environmental protection and safety".
Asian Metal: Hello, Mr Xue! Welcome to the interview by Asia Metal, please briefly introduce your company and main business.
Mr. Xue: Our company is located in Jinzhong, Shanxi, which is used to known as "China's Wall Street". The company covers an area of 53,333.6 square metres and has more than 100 employees, including more than 20 technicians. We also have a senior technician research and development institution. The annual production capacity of bismuth metal is about 2,000 tonnes, that of crude copper is about 2,000 tonnes, that of crude silver is about 30 tonnes, that of electrolytic lead is about 30,000 tonnes, and there are other by-products such as antimony, tin, tellurium, zinc and so on.
Asian Metal: What are the advantages of your company's products? How do you deal with the environmental protection issue in the production of bismuth ingots?
Mr. Xue: Our enterprise is a high-tech enterprise mainly focusing on comprehensive recycling of non-ferrous metal smelting residues, our advantage lies in more than twenty years of experience and process of bismuth production in refining, always taking quality as the first, effectively controlling the content of impurities in the process of refining (silver, lead <5PPM), and producing bismuth ingot products with super high quality. Environmental protection pressure is getting higher and higher every year. The production of bismuth ingot, like other non-ferrous metallurgy, produces waste gas and slag, etc. We have been investing heavily in the process, trying to reduce the emission of waste gas by improving the recycling and effective use of flue gases, consolidating the number of emission outlets and implementing stricter and higher emission standards.
Asian Metal: The bismuth market shows upward trend since early this year, what is the supply of major raw material?
Mr. Xue: The main raw materials for bismuth ingots come from lead-bismuth-containing soot produced in the copper smelting process and bismuth-containing dregs from zinc factories, as well as part of bismuth concentrates, high bismuth alloys, crude bismuth, etc. The current raw material supply situation is not optimistic. In the past, the supply of bismuth concentrate was relatively sufficient, but at present, only a few enterprises such as Hunan Shizhuyuan, Jiangxi Tungsten and Xiamen Tungsten can supply bismuth concentrate, and the grade of bismuth concentrate has been reduced from the previous 35% to about 24%. And the supplies of other bismuth-containing materials such as bismuth alloys have also decreased significantly. We mainly purchase bismuth concentrates and lead-bismuth alloys, the proportion of which has remained stable at around 70%. In the future, we have plans to purchase bismuth concentrates from African countries such as Zambia and Congo because there are very high grade bismuth concentrates there, of which the grade can reach more than 70%, but the supply is relatively unstable due to political unrest. Before 2019, we imported several hundred tonnes of bismuth concentrates from Bolivia and Peru in South America, with a grade of 3-5%, but due to the local policy reasons, we did not reach a long term co-operation in the end.
Asian Metal: In 2023, the prices of bismuth ingot in China have been hovering at around RMB55,000/t, while in 2024, the prices rose sharply since early May Day, once exceeding RMB100,000/t. What do you think is the main reason for the price increase? Do you think the prices would keep rising?
Mr. Xue: After this year's Spring Festival, the Chinese bismuth ingot producers' stocks remain limited, so producers generally slowed down the pace of sales and shipment. Besides, the relative tension of bismuth raw materials also deepened the market sentiment that producers generally held back from selling. Around the Labour Day holiday, most of the producers in Hunan halted production for maintenance due to environmental protection inspections, aggravating the situation of tight supply of bismuth ingot. Meanwhile, as the bismuth prices were still at a low level at the beginning of the year and continued to hover at RMB55,000/t over the past year, the market was in a high speculative mood on bismuth prices after the Labour Day holiday, and a large amount of capital speculated into the market, which played a leading role in the rise of bismuth ingot prices. In the long run, we have been more optimistic about the future trend of bismuth prices as the supply tension of the raw material is difficult to change in the long term, while the demand has been maintaining a steady growth.
Asian Metal: What is your expectation on the price trend of bismuth ingot in the next three months?
Mr. Xue: I think the prices of bismuth ingots will keep a steady upward trend in the next three months. At present, the supply of bismuth ore is very tight and the prices have been going up with the prices of bismuth ingot. As for bismuth-containing materials, the domestic environmental protection situation is tightening, and the supply of raw materials for bismuth smelting is very tight in the current market. Our latest dealing price of bismuth concentrate reached RMB92,600/t, so the we have to raise the price of bismuth ingot accordingly. Moreover, the downstream is also focusing on consuming inventories after the price increase, and would have to accept the price when they need to replenish stocks. It is expected that the prices of bismuth ingot would stabilize at RMB90,000-100,000/t.
Asian Metal: What is your sales layout in China and do you have any plans for overseas markets? Please tell us the planned output of bismuth ingot of your company and the downstream consumption during the whole industry in the coming year.
Mr. Xue: We mainly sell in the spot market since this year. In the previous years, we mainly focused on long term orders, but at the end of last year, we thought that the prices of bismuth ingots remained seriously low, while the supply of raw materials kept very tight, thus, we judged that the prices might change this year, so we finished all long term orders at the end of last year and turned to spot sales. Next we will decide whether to sign long term orders or not according to the price change and market supply and demand situation. We do not have any plan to explore overseas market at present as the domestic demand is the largest in the world, so we will focus on the domestic market. Our planned production of bismuth ingots in 2024 is 1,500-2,000 tons. In the short term, the downstream would find it difficult to accept the price increase, but would eventually recognize the tightness of bismuth supply and eventually accept the prices. China's bismuth development has the advantages of abundant resources and more advanced technology. Bismuth materials and products are widely used in medicine, chemical industry, catalysis, alloy, semiconductor, superconductor, electronics and other fields, and bismuth-based medical nano clinic has broad prospects. We hold confidence about the downstream consumption of bismuth ingot in the future.
Asian Metal: What is your company's development plan in 2024?
Mr. Xue: In 2024, our company will continue to enhance our core competitiveness and independent innovation capability, and to promote the high-quality and sustainable development. To become a global leader in the bismuth industry, we strive to promote the recycling of bismuth resources, continuously improve the disposal capacity of bismuth-containing materials and promote the industrialization of bismuth resource recycling!
Asian Metal: Thank you for your wonderful sharing, and wish your company prosperous future!
