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    Chinese manganese lump market to see stable demand in Q3 2020
    ----Interview with Huang Wanhong
    Chairman
    Hunan Jinlong Manganese Industry Co., Ltd.
    Founded in 2004, Hunan Jinlong Manganese Industry Co., Ltd. has become a private enterprise specializing in manganese products with fixed assets of RMB100 million (USD14.17 million) and registered capital of RMB66.8 million (USD9.47 million) from a small-sized industrial and trading company after developing for more than one decade. The company's headquarter is located in Hunan Xiangtan Jiuhua Economic Development Zone and the plant is located in Xiangtan of Hunan, the "manganese capital" of China, with convenient transportation by neighboring to Xiangjiang highway, Shangrui highway and G107 highway and having a special access to Xiangqian railway. Holding the ISO9001:2008 quality system certification certificate, the company delivers a better performance in many economic and technical indicators compared to national standards and has stable cooperation with major Chinese steel mills, such as Nanjing Iron and Steel, Baosteel, Shaoguan Iron and Steel, Shougang, Benxi Steel, Masteel, Ansteel and Zenith Steel. Its products are exported to Southeast Asia, Europe and America. The official website of the company is www.hnjlmy-mn.com.

    Asian Metal: Thank you for accepting our interview, Mr. Huang. Please give us a brief introduction of your company first.

    Mr. Huang: Our company is mainly engaged in production and trading of manganese flake, manganese lump, manganese briquette, HC, MC and LC ferromanganese, manganese carbonate powder, manganese dioxide powder, electrolytic manganese dioxide and other manganese products of stable quality at present. We have manganese powder processing, ferroalloy smelting, electrolytic manganese dioxide and manganese flake plants covering more than 50,000 square meters in total. With a solid technical team consisting of over 30 intermediate and senior engineering technicians and management staff, we have been acting as the strategic partner of Xiangtan Electrochemical Scientific Ltd. since 2009 and specially assign technical personnel to carry out sampling, sample preparation and test in Hongqi and Xianfeng pits of Xiangtan manganese mine. As one of the third batch of ferroalloy industry qualified enterprises approved by NDRC, the company owns a complete set of production flow chart, including mining, processing of manganese carbonate powder and manganese dioxide powder, production of electrolytic manganese dioxide and deep processing of manganese alloys. After Luxi alloy plant and Ningxia alloy plant went into commercial production on 19 October, 2016 and in November 2017 respectively, we have a monthly production capacity of 5,000 tons of alloys.

    Asian Metal: How about the production of your main products?

    Mr. Huang: Our plants in Hunan, Ningxia and Inner Mongolia with a total annual production capacity of 100,000 tons actually produce around 60,000 tons of manganese lump per annum and our manganese flake 99.7%min plant has an annual production capacity of 15,000 tons.

    Asian Metal: Besides Hunan where your headquarter is located, you also have manganese lump processing plants in Ningxia and Inner Mongolia. May I know your strategies and how about the production and operation of these two plants?

    Mr. Huang: Our manganese lump plants in Ningxia and Inner Mongolia have a designed annual production capacity of 30,000 tons and 20,000 tons respectively, while plants in Luxi and Xiangtan of Hunan are of a designed annual production capacity of 25,000 tons respectively. With plants in North China, we can have a wider market coverage. In terms of finance, we can reduce the transportation cost of raw materials and products, improving competitiveness in bids of steel mills. Presently, the plant in Ningxia is in normal production while the plant in Inner Mongolia is out of production temporarily for maintenance.

    Asian Metal: What are your core competitive advantages in the industry?

    Mr. Huang: Our core competitive advantages include the following four aspects:
    (1) In terms of production process, we are superior in cost control as we mainly adopt electrolytic remelting method.
    (2) In terms of product quality, our products are of low phosphorus and low sulfur, which can notably reduce smelting cost of downstream steel mills.
    (3) In terms of raw material procurement channel, we have clear advantages in procurement cost and supply channel of manganese flake as we have our own manganese flake plant and also have long-term strategic cooperation with Ningxia Tianyuan Manganese, the world's largest manganese producer, and Aketao Kebang Manganese, the fourth largest manganese producer.
    (4) In terms of customer base, our company receives unanimous support from major Chinese steel mills with high quality and excellent reputation after working hard in manganese alloys market for over one decade and has long-term stable cooperation with Nanjing Iron and Steel, Baosteel, Shaoguan Iron and Steel, Shougang, Benxi Steel, Masteel, Ansteel and Zenith Steel and other steel mills.

    Asian Metal: You are mainly engaged in production and trading of manganese lump. Could you tell us something about your manganese lump sales volume in Q2? And in your opinion, which trend would downstream demand show in the coming Q3?

    Mr. Huang: We sold around 9,000 tons of manganese lump in Q2 2020, in line with the same period of last year. The global economy showed a downturn under the influences of COVID-19, while most Chinese steel mills kept normal production. In addition, prices for imported manganese ore soared from April, resulting in increasing prices for manganese alloys. Thus, Chinese steel mills raised purchase volumes of manganese flake and manganese lump to some extent in the second quarter. In our view, demand for manganese flake from Chinese steel mills wouldn't decline in Q3 and might stand at the same level of Q2 at least.

    Asian Metal: Manganese flake prices went down slowly from the last week of May. What are the reasons? What are your views about the price trend in Q3?

    Mr. Huang: Price for Chinese manganese flake 99.7%min dropped continuously to RMB10,200/t (USD1,444/t) from RMB10,700/t (USD1,515/t) EXW D/P in the last week of May in Chinese market mainly because of weak downstream demand. Although manganese flake consumption of Chinese steel mills increased, some manganese flake producers cut prices to recoup funds due to sluggish demand in spot market and overseas market. Demand for manganese flake is expected to remain weak, but manganese flake prices are unlikely to decline notably in the following quarter considering that most Chinese manganese flake producers are at a loss or close to loss.

    Asian Metal: Jinlong Manganese has a solid customer base in Chinese steel industry at present. Do you plan to develop overseas market?

    Mr. Huang: We sell over 80% of our manganese lump to Chinese steel mills now and have excellent product quality and reputation. We have been planning to develop overseas market as demand for manganese lump from Europe and Russia is strong. We plan to positively develop high-quality overseas steel mills and set up stable cooperation on supply by further improving the cost performance of products, while keep domestic market shares stable.

    Asian Metal: What are your development goals for the next three years?

    Mr. Huang: We have grown into a well-known Chinese manganese alloys producer in recent years. In the following three years, we will continue improving product quality and optimizing raw material supply channel and production process for better cost advantage and get more market shares by adhering to the development idea of integrity and credit first. Meanwhile, we will set up the international sales unit to develop overseas customers and sell our featured product manganese lump in international market.

    Asian Metal: Thanks a lot for joining our interview. Wish Jinlong Manganese a thriving business. Wish you good health and all the best.

    Mr. Huang: Thank you. Wish Asian Metal a brighter future.
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