----Interview with Li Shi
General Manager
Yunnan Hongrui Metallurgical Technology Co., Ltd.
Yunnan Hongrui Metallurgical Technology Co., Ltd. was established in 2015 and is located in Yongren County, Yunnan Province. It is a wholly owned subsidiary of CHALCO Environmental Protection Yunnan Keli Environmental Protection Co., Ltd., under Aluminum Corporation of China (CHALCO). The company is the only enterprise in Yunnan Province engaged in the comprehensive recycling and utilization of mercury-containing acid sludge and lead filter cake resources, and is also the only central state-owned enterprise in China operating in the mercury-containing acid sludge disposal sector. The company has an annual processing capacity of 3,120 tonnes of mercury-containing acid sludge, operates two industrial processing lines, holds two invention patents, is certified as a high-tech enterprise, and maintains long-term industry–academia–research cooperation with well-known research institutes.
Asian Metal: Mr. Shi, welcome to this interview with Asian Metal. To begin with, could you briefly introduce your company?
Li Shi: Yunnan Hongrui Metallurgical Technology Co., Ltd. was founded in 2015 and is located in Yongren County, Chuxiong Yi Autonomous Prefecture, Yunnan Province. The company is affiliated with Aluminum Corporation of China and is a wholly owned subsidiary of CHALCO Environmental Protection Yunnan Keli Environmental Protection Co., Ltd. We are the only enterprise in Yunnan Province engaged in the comprehensive recycling and utilization of mercury-containing acid sludge and lead filter cake, and also the only central state-owned enterprise in China specializing in mercury-containing acid sludge disposal. Our annual processing capacity for mercury-containing acid sludge reaches 3,120t, and we expect mercury metal output to be around 50t this year. We operate two industrial lines for the comprehensive recycling of acid sludge, covering both hydrometallurgical and pyrometallurgical processes, which enable the extraction of mercury metal and refined selenium from mercury-containing acid sludge and lead filter cake. The company holds two invention patents related to acid sludge disposal technologies, and has been recognized as a high-tech enterprise, a “specialized, refined, distinctive and innovative” enterprise, and an innovative SME. We also maintain long-term and in-depth cooperation with leading domestic research institutes, ensuring our processing technologies and operational indicators remain at an advanced level within the industry.
Asian Metal: What are the core competitive advantages of your mercury metal production?
Li Shi: Our competitive advantages are mainly reflected in three aspects. First, we have a complete and integrated processing system, operating both hydrometallurgical and pyrometallurgical lines, which allows for comprehensive resource recovery. More than 90% of the valuable metals contained in mercury-containing acid sludge can be effectively recovered. Second, we have a strong and professional R&D and technical team. Our mercury and selenium recovery technologies are advanced, featuring high overall recovery rates and relatively low processing costs. Third, our raw material supply of mercury-containing acid sludge and lead filter cake is well secured. The primary sources are copper, lead and zinc smelting enterprises within the CHALCO group. In addition, Yunnan is a major smelting province, and our company accounts for approximately 90% of the mercury-containing acid sludge treatment market within Yunnan Province.
Asian Metal: Over the past two years, mercury metal prices have risen by nearly 200%. What do you think are the main drivers behind this surge?
Li Shi: Following the implementation of the Minamata Convention, the mining of mercury ore and natural cinnabar has been prohibited, resulting in a highly concentrated and limited source of mercury metal. At present, mercury production mainly relies on the extraction from mercury-containing hazardous wastes, such as spent mercury catalysts, mercury-containing acid sludge and waste mercury reagents. Meanwhile, demand from downstream application markets has not declined. Mercury metal is still widely used in PVC production for mercury-based catalysts, artificial cinnabar handicrafts, gold extraction for export, as well as military and pharmaceutical applications. Since 2023, downstream industries have generally shown strong demand absorption capacity. The actual price rally began in early 2023, initially driven by strong demand for mercury-based catalysts from the PVC industry. In the second half of 2023, the recovery of the tourism sector boosted demand for cinnabar handicrafts. In 2024, continued increases in gold prices further pushed mercury prices higher. Entering 2025, growing orders from the defense industry have provided sustained support for mercury metal demand.
Asian Metal: However, mercury metal prices did not continue to surge in 2025. What are the reasons behind this?
Li Shi: First, raw material supply for mercury metal remains limited. At present, the main sources are spent mercury-based PVC catalysts and mercury-containing acid sludge generated by copper, lead and zinc smelting operations. Second, mercury extraction capacity is significantly excessive. China’s total mercury metal production capacity exceeds 5,000t, while actual output is only around 1,200t. There are roughly 20 mercury extraction plants holding hazardous waste operation licenses, with a combined disposal capacity exceeding 100,000t. In order to maintain licenses and basic operations, these companies compete intensely with each other. In addition, as mercury prices have continued to rise, some upstream waste-generating enterprises have begun constructing their own processing lines, further tightening the availability of raw materials. From the demand side, downstream consumption has weakened this year. At present, demand is mainly supported by military orders, while PVC and cinnabar-related demand remains relatively soft. For example, the mercury content in PVC catalysts used to be around 6%, but due to high prices, catalyst producers have deliberately reduced mercury content. Some PVC producers are even seeking cheaper alternatives to mercury-based catalysts. Cinnabar demand has also softened this year, with sales performance falling short of previous levels, leading to a decline in mercury metal consumption. These factors combined have prevented mercury prices from continuing their upward momentum in 2025.
Asian Metal: How does your company address and secure raw material supply?
Li Shi: First, we leverage our group advantages by ensuring that hazardous waste generated within the group is treated internally, thereby centralizing raw material supply within CHALCO. Second, we capitalize on our geographical advantages and the principle of nearby hazardous waste disposal to establish cooperation for raw materials within Yunnan Province. Finally, we rely on our comprehensive recycling lines and technological strengths to maximize the recovery of valuable metals, improve recovery rates, reduce processing costs, and enhance procurement coefficients, thereby sharing benefits with upstream waste-generating enterprises.
Asian Metal: How do you view mercury metal demand in the first quarter of 2026?
Li Shi: In my view, the demand in the first quarter of 2026 is likely to remain stable or increase slightly. In the fourth quarter of this year, upstream suppliers have been reluctant to sell due to tight supply, while downstream consumers have carried almost no inventory. As a result, downstream restocking is expected to be concentrated in the first quarter of next year, with demand potentially increasing by at least one-third compared with the fourth quarter of this year.
Asian Metal: What is your outlook for prices in the first quarter of 2026?
Li Shi: I believe mercury metal prices may see a modest increase in the first quarter of 2026. This is mainly due to tight supply in China and continued reluctance among upstream suppliers to release material, which is expected to provide upward support to prices.
