Asian Metal: Good morning, Mr. Wang. Thank you for accepting this interview. Firstly, would you like to make a brief introduction about the main business of your company?

Wang: Founded in 200 as a trading company, our company focuses on the business of non-ferrous metals, ferroalloys, rare and noble metals, such as tin, copper, aluminum, lead, zinc, magnesium, antimony, bismuth-cadmium, nickel plate, electrolytic manganese, silicon metal, selenium, tellurium, gallium, titanium sponge, chrome metal. Our places of delivery include Shanghai, Shenzhen, Foshan, Jinan, Tianjin and Shenyang. We have established a long-term and stable relationship with domestic customers.

Asian Metal: Can you let us know the annual trading volume of tin ingot in your company?

Wang: The trading of tin products belongs to our major business. We can sell about 1,000t of tin products per month or 12,000t of the material per year through all channels of distribution, including switch transaction with other traders or end users.

Asian Metal: China’s tin prices started to increase rapidly in late 2015 and have fluctuated for a long time since late 2016. What do you think of the main reason for tin prices to change in China?

Wang: Financial preference and participation condition are most important factors to influence tin prices in China currently. Since the start of tin transactions in SHFE , China’s tin prices have got rid of supply-demand mode in the spot market and tin prices are easy to be controlled due to limited product variety. Seeing from the price trend of SHFE Tin 1705 Contract and change of stocks recently, tin stocks have declined substantially no matter tin prices in the futures market increased or declined, indicating that capitals start to exit and the attraction of tin products is declining which results in an awkward condition that capitals of large amount are not interested in transactions in futures market while capitals of small amount can’t afford to participate in this kind of transactions. The speculation activity of related agents was one of reasons for SHFE tin transactions to be considerable in 2016.

Asian Metal: What kind of adjustments have you made in trading mode since the beginning of tin transaction in SHFE on March 27, 2015?

Wang: We have made several adjustments. Firstly, traders seldom keep unilateral trade and almost all of them participate in hedging activities; our company also changes to mainly conduct hedging activities. Secondly, we have changed our ways to make quotations; we used to research the change of LME tin prices, transactions and supply in the spot market for reference when we made quotations in the spot market, but now we mainly research SHFE tin prices as LME tin prices have almost no values for reference. Lastly, the variation range of prices widens now; we could say prices have changed sharply before if the variation range was RMB2,000/t, but the prices can even increase by RMB8,000/t per day since the begging of tin transactions in SHFE.

Asian Metal: As far as I know, the export tariff and quota of refined tin are canceled now. What kind of influence do you think it will bring to tin market in China or even in the world? Is your company interested in exploring international market?

Wang: I don’t think it will bring a great influence on tin market and I even it won’t bring any influences at all. There are not many chances to make hedges through the ratio between SHFE and LME tin market unless overseas or domestic market sees sharp increase or decrease. Meanwhile, the ratio between SHFE tin and LME tin changes continuously. It needs a period of time to finish export transactions with difficulties to operate in the export market. In addition, stocks for China’s refined tin are stable at about 12,000t and haven’t been seriously excessive. Thus, Chinese suppliers don’t have enough impetus to do export business interested of domestic business. We have never done any exports for refined tin before. We once exported cobalt metal, but have stopped the export now.

Asian Metal: As a representative for tin ingot traders, can you tell us the most difficult part to be controlled when you make transactions?

Wang: Tin occupies a small proportion among basic non-ferrous metals and thus it’s hard for us to know the real supply and demand condition in the spot market, resulting in some problems in price prediction.

Asian Metal: The spot market has seen sufficient supply since the beginning of 2017, however, market participants generally reflect that the demand this year is less than previous years. What is the reason and what kind of influence does it bring to traders?

Wang: The demand in 2017 is really worse than previous years. In my opinion, the capital chain rupture is the main reason. On the one hand, due to the character of low liquidity, only limited capitals are injected into tin products market; on the other hand, banks have reduced their loans. In addition, it is easier for capitals to be invested in financial products which have high rates of return, while it’s less easy for substantial economy to draw attention with difficulties to conduct production. However, the substantial economy is the base for capitals to develop as capitals without substantial economy look just like the water without a source. We concluded limited transactions in early 2017, but our transactions have picked up slightly since late February.

Asian Metal: Why tin prices of traders are usually lower than quotations of producers?

Wang: The most import reason is that traders use hedging method, and there are also some different reasons for different enterprises.

Asian Metal: What do you think of tin price trend in the Chinese market in 2017 in connection with international environment, market policy and supply-demand relation?

Wang: The tin price trend of 2017 will be mainly influenced by the participation condition of capitals beside black swan events. SHFE tin price have reached average price lines and we will see how they will make some breakthroughs in the future. I hold a pessimistic attitude towards the price trend in 2017 and it’s not easy for prices to be RMB160,000/t at most. It is expected that tin prices will fluctuate at RMB130,000-160,000/t in 2017.

Asian Metal: Thank you once again for sharing your views with and offering your supports to Asian Metal. We wish your company a better future.