Jian Ding: It’s my honor to host the Discussion for “World Silicon Forum 2013” held by Asian Metal. Firstly, let’s welcome all the guest to make a brief introduction of their companies.

Zhiyong Zheng: Xiamen K Metal Co., Ltd. is a branch of Linan Group Co., Ltd., which is a factory integrated with the research, production and sale of silicon metal, silicon metal powder, ferromanganese, aluminium ingot, and textile ect. There are more than 17 silicon furnaces located in Fujian and Guizhou province in China. With the annual output 60-80 thousand tons for silicon 5-5-3, 4-4-1, 3-3-0-3, 2-2-0-2, 2502, 20 thousand tons for ADC-10 and ADC-12, the company has the advantage of high grade, low ferro and low phossy silicon products.

Benjamin CRESPY: FERROATLANTICA, SA entered Mangshi Sinice Silicon Industry Company Limited in late 2010 and improved the three furnaces of 27,000kva. The furnaces were put into production since late May 2012. As the first silicon metal plant that FERROATLANTICA, SA invested in China, Mangshi Sinice Silicon Industry Company Limited, with an annual capacity of 50,000t, mainly supplies silicon metal to Chinese and other Asian countries.

Lanqing Shi: Zhejiang Zhongcheng Silicon Co., Ltd. (Abbr. Zhongcheng) mainly specializes in manufacturing, researching and marketing of silicon metal, silicon powder, and also engaged in polysilicon, coal, magnesium ingot, petroleum coke and other products. The company owns seven 12500KVA silicon smelters in Yunnan Province, with annual capacity of 50,000tonnes silicon metal, and two silicon powder grinding factories with annual capacity of 50,000tonnes silicon powder. The company owns manufacturing plants and R&D Centers in Yingjiang, Yunnan Province, Huaihua, Hunan Province, Xinyu, Jiangxi Province, and offices in Xiamen, Beijing and Shanghai, to offer most high-quality services to the clients more conveniently

Zongyou Li: Yunnan Yongchang Silicon Industry Co., Ltd. has established a production line capable to produce 70,000t of silicon metal, 20,000t of ferrosilicon, 20,000t of silica fume, and 4,000t of ganister sand per year. The company has 7 low-hood semi-closed rotation types of submerged arc furnaces of 25500KVA and12500KVA and 12MW of the installed cogeneration capacity as of now. The company started the doubling energy conservation and environment protection project for annually producing 100,000t of chemical silicon metal in 2011, the completion of the project would see a production scale to annually outputs of 170,000t of silicon metal, 20,000t of ferrosilicon, 60,000t of silica fume and 47MW of installed cogeneration capacity.

Guojun Ma: Beijing Dadi Zelin Silicon Co., Ltd. is one of the largest silicon powder suppliers for polysilicon in China, and it has silicon powder factories in Beijing, Qinghai, Xinjiang.

Jian Ding: Now let’s begin the discussion. Currently, one of the hottest topics in the market is the power price and the market trend in the rainy season. Please introduce your current production situation and the power policy in different areas in the rainy season. Mr. Lee, please make an introduction first.

Zongyou Li: The power price of rainy season for Baoshan area has not come out yet and it is heard that it will be around RMB0.3/kwh. If the basic power price is RMB0.29/kwh, the final power price to smelter will be RMB0.31/kwh. I’m not optimistic about the future market. Chinese silicon metal prices have dropped sharply up till now this year and the prices are low now, which are blow some smelters’ production cost level. However, there is still no strong signal for the market to pick up obviously. The downstream organosilicon and polysilicon markets are still unfavorable, and maybe the demand from aluminum alloy market may increase slightly.

Jian Ding: Mr. Zheng, could you please make a brief introduction of the power policy in Guizhou and Fujian to us.

Zhiyong Zheng: Linan Group only runs two furnaces in Guizhou now. With the subsidy from the government, the current power price is around RMB0.5/kwh (8cent/kwh) and we are running with difficulties. In January to April, the power price in Guizhou was RMB0.62/kwh (10cent/kwh) and the subsidy from government was RMB0.12/kwh (2cent/kwh) and there were some other subsidies from the government. However, maybe the subsidies will be cancelled after May and the power policy for June has not become clear. In Fujian, the power price was RMB0.41/kwh (6.7cent/kwh) from January to June, and the policy after June is unclear now.

Jian Ding: Mr. Shi, please introduce the production situation of your smelters in Yunnan and share your ideas on the future market trend.

Lanqing Shi: The power price for rainy season in Dehong is clear now and this year it will be in line with the silicon metal prices. If smelters resume production before June 1st, the power price for the rainy season will be RMB0.31/kwh (5cent/kwh). If smelters do not resume production before June 1st, the power price will be around RMB0.36/kwh (5.8cent/kwh). As I learned, most smelters will resume production around June 1st.

Jianding: Thank you, Mr. Shi. Now let’s welcome Benjamin to make a brief introduction of FERROATLANTICA’s silicon business in China and the global silicon metal market situation.

Benjamin: We plan to resume production of the smelter in Yunnan in June after the power price decrease. I think the current silicon metal prices are very low now, which are below many smelters’ production cost. The overall market supply was not large recently but many smelters will resume production when the rainy season starts, and I’m not optimistic about the future market. The demand for silicon metal in European and US markets is also weak now and the prices keep at low level.

Jian Ding: Thank you. Mr. Zheng and Mr. Shi, do you have any suggestions to the logistics companies in Yunnan?

Zhiyong Zheng: From my experience of trading these years, I think Yunnan Guichu Logistics Co., Ltd. and Yunnan Grand Silicon Logistics Co., Ltd. insured the products quality and the safety of trading. I find that the freight cost from Kunming to Huangpu increased continuously since last year. Yunnan silicon metal prices were competitive previously, but sometimes the prices in Yunnan were even higher than those in Fujian this year.

Lanqing Shi: Mr. Ding (from Grand Silicon Logistics) and Mr. Xie (from Guichu Logistics) have been in the field of warehousing and logistics for many years and they offered big convenience for market players. Yunnan silicon metal capacity accounts for a large proportion of Chinese total capacity of silicon metal and the proportion is getting smaller with the development in Xinjiang. Smelters in Xinjiang are more competitive in power policy. Yunnan silicon metal smelters do not emphasize on other impurities (except Fe, Al, and Ca) of silicon metal previously, but the test of other impurities in Yunnan is increasing now, especially in P, B and even Ti and Carbon. So sometimes the prices of silicon metal in Yunnan are even higher than those in Fujian. But the charge is normal under the demand changes in the market.

Jian Ding: Mr. Ma, you purchased large quantities of silicon metal from Yunnan previously, but the volume decreased last year and you mainly purchased the materials from Xinjiang. Please introduce your company’s situation.

Guojun Ma: We decreased the purchasing volume of silicon metal from Yunnan last year. The freight cost increased much last year. The quality of Yunnan silicon metal is good and the reputation of smelters is also good, but the price decides our purchasing as the overall economy is unfavorable. The production cost in Xinjiang is more competitive than that in Yunnan.

Jian Ding: Thank you again to all the guests.