| Ferrosilicon industry may warm up in the second half of 2009 | |||
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Asian Metal: As for the demand from foreign customers, there are more South Korean consumers in the market since April, and also some Japanese trader have the intention of purchasing some materials currently. Mr Zhang: The statistics shows that Japan imported about 7,700t of ferrosilicon from China, increased by 2,100t on the basis of 5,600t in March. It is estimated that the volume will be 9,000-10,000t in May. Although the export volume increased a little bit, the price has not changed much, still in the range of USD1,050-1,080/t. The demand of ferrosilicon from South Korea was quite stable in the third and fourth quarter of last year, and they just started the purchase a little earlier this year. Asian Metal: The Chinese economy is recovering now, so what about the situation in other countries? Mr Zhang: The economic situation is also improving in other countries. For example: the Consumer Confidence Index in Germany remains at a high level, and the salary income in the United States has not decreased in April though it did from January to March. It is really a positive sign. However, Japanese consumers are a little bit pessimistic, and the Consumer Confidence Index has reached the record low. In April, Japanese crude steel output has decreased by 43.6% in April, compared with that of 2008, and the utilization rate of capacity is only 60%. However, the output of stainless steel has decreased by 9.5% compared with that of March, which indicates that foreign consumers have few materials in stock now, and the demand of ferrosilicon may become better. Therefore, I think the market will improve in the third quarter, but not greatly. Asian Metal: It is the time to have some uncompetitive enterprises to fall into disuse, but it will affect the employment greatly. Actually the central government keeps trying to restrict the development of ferrosilicon industry, and they cancelled the preferential power price and increased the export duty. Do you have any suggestions about the government's policy? Mr Zhang: In terms of the adjustment of industrial structure, the government policy is quite right, and the industrial structure needs an adjustment, otherwise it will become very chaotic. Moreover, some industrial policies of Development of Reform Commission for the time being are also very right, but it is a special time now, and contradictions among excess production capacity, local economic growth and employment are more prominent. Anyway, the central government should adjust the Industry, but in the period adjustment, the local government together with central government should take proper policies and measures, and smelters need some times to be seasoned with the industrial adjustment and upgrade. Ferrosilicon companies are really in a difficult position, and it is closely related to the steel industry. Production capacity of Chinese steel is surplus, and steel outputs in other countries are also decreasing now. For instance, Japan plans to produce 0.8 billion tons steel, but as far as the current situation is concerned, the output can not reach that level, and it will affect ferrosilicon demand from foreign consumers. |
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