Asian Metal: Hello, Miss. Zhang! Thank you for accepting the interview of Asian Meal. Would you please make an introduction to your company firstly?

Miss. Zhang: Shanghai Gaopeng Metal Material Co., Ltd. has focused on the development of electroplating industry for about 20 years and has won a reputation in the global electroplating industry, especially in terms of the supply of raw materials relating to electroplating industry. We mainly supply raw materials, such as nickel cathode, copper cathode, chemical materials and additives, to customers from electroplating industry. In addition, we also supply supporting services, including warehousing, distribution and analysis on technology and market.

Our nickel raw materials include nickel metal produced by Vale, Jinchuan, Jien, Norilsk and other companies. In particular, we have sold nickel metal produced by Vale for over ten years. We mainly sell Jinchuan and Vale nickel cathode now and the total sales in 2019 reached about 12,000t, 75% of which were sold to electroplating industry with the rest sold to alloy industry. In addition, we sell about 5,000tpy of nickel salts.

Asian Metal: Nickel cathode prices declined constantly in the Chinese market in Q4 2019, but the demand for electroplating products was still weak. What do you think of this condition?

Miss. Zhang: Affected by strict environmental protection policies and less demand for vehicles, the demand for electroplating products was soft in Q4 2019, leading to weak demand for nickel cathode. Although the demand for electroplating products used in different fields fluctuated to different degrees, the overall demand generally kept stable as these products could be widely used in electronics, hardware, sanitary ware and other areas apart from vehicle area.

Asian Metal: Did the increasingly strict national requirement on environmental protection greatly affect the demand for electroplating products in 2019?

Miss. Zhang: Environmental protection policy, Sino-US trade friction and the decreased demand for vehicles were major reasons for the less demand in the electroplating industry in 2019. Our nickel cathode sales decreased by around 10-20% YOY in 2019.

The national requirement on environmental protection brought more influences on downstream electroplating plants. Affected by the environment protection requirement, they had to upgrade their equipment every five or six years, leading to higher production costs and less profit margins. They bore greater pressure of funds every time when they upgraded their equipment. Nevertheless, from a long-term perspective, the introduction of automated equipment will be conducive for them to reduce labor costs and overall costs to some extent.

Asian Metal: Do Chinese electroplating plants or electroplating raw material traders refill stocks of nickel cathode now as the Spring Festival is approaching?

Miss. Zhang: Most electroplating plants took about one month of Spring Festival holiday in previous years and used to start refilling nickel cathode stocks one month before the holiday. As the Spring Festival of this year is in late January 2020, most electroplating plants already started restocking in December 2019, leading to more demand in the current market. Meanwhile, traders also started adding stocks in December 2019, but they just make limited replenishments now affected by soft demand from end users and sharply fluctuated nickel cathode prices in 2019. To some extent, electroplating plants keep normal purchases for nickel cathode at the moment.

Asian Metal: How do you think of the demand for electroplating products in 2020?

Miss. Zhang: We expect that the demand for electroplating products would be basically stable in 2020. There are only limited stocks in the Chinese spot market currently. We expect that the demand in 2020 would keep unchanged from 2019 as most domestic customers already cut their demand when the Sino-US trade friction started. We are optimistic about the demand from vehicle industry in 2020 as Tesla would put its plant in China into operation in the second half of 2020.

In general, despite that the demand for electroplating products in different fields would fluctuate to different degrees, we expect that the overall demand from end users would not change greatly as these products can be widely used in many areas.

Asian Metal: As we all know, Indonesia starts to ban nickel ore export in 2020. Do you think Indonesia's nickel ore export policy will bring some influences on electroplating market?

Miss. Zhang: Actually, we think that Indonesia's ban on nickel ore export would bring more influences on the supply of ferronickel and would accordingly cause downstream ferronickel smelters to be bullish about the ferronickel market outlook. We think that Indonesia's nickel ore export policy would directly result in higher premiums for nickel cathode and electroplating plants would accordingly suffer higher production costs.

Asian Metal:Would you like to share with us your development plan and target in the future?

Miss. Zhang: In view of the current electroplating market condition, we will continue to help our customers solve relative problems based on their requirements in order to ensure the long-term development of them. We are committed to be a "router" within electroplating industry. That is to say, we will help spur the demand from end users through integrating upstream and downstream resources both at home and abroad so as to form a virtuous circle of the industry, build a platform for the entire industry chain and promote domestic products to enter the international market.

Asian Metal: Thank you once again for sharing the above information with us. Wish your company a bright future.