Asian Metal: Nice to meet you, Mr. Deng. Thank you for accepting Asian Metal’s interview. Shanxi Jinxing Magnesium Co., Ltd. is a renowned enterprise in this industry. Price of magnesium ingot has shown a declining trend in domestic with increased inventories, however, the export price showed a firm state. How do you think about this situation?　

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Deng: Thanks, nice to accept the interview from Asian Metal! After National Day, with increased stocks in magnesium ingot production areas, magnesium ingot producers move down offers actively to relive the sales pressures. Price of magnesium ingot decreases to RMB17,700-17,800/t (USD2,832-2,848/t) ex works in Shaanxi, and RMB18,000-18,200/t (USD2,880-2,912/t) ex works in Shanxi. However, from the whole view, the demand in the domestic and overseas markets is still poor, downstream buyers incline to watch market for a while with expectation of much lower offers in the market rather than make replenishments for the time being.

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About the export market, the firm price level in export market mainly caused by hysteretic reactions from overseas market. At the same time, the appreciations of RMB also influences the export price. Considering the situation, price of magnesium ingot is in a firm state.

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Asian Metal: As far as I know, Jinxing Magnesium business covers with domestic and overseas markets. How does your company concern with domestic and overseas markets in such a gloomy economic state. In addition, have you ever considered decreasing the rates of overseas market and paying more attentions to domestic market?

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Deng: Entering 2012, the global economy remains fragile and tragic as Europe continues to struggle with their debt crisis; the US economy grown sluggish and even China, a global economic powerhouse, has been bogged with many industries incurring negative growth, especially within most resource sectors. While uncertainty continues to plague the international market, many eagerly await H1 financial earnings and production results from publically traded companies in order to plan future intake. Even though our company is devoted to domestic and overseas markets, considering the sluggish economic environment in overseas market, we adjust the rates inside and outside. Currently we reduce the shares in overseas market, and covers about 70% for domestic market.

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Asian Metal: Currently price of magnesium ingot is in a decreasing trend with few deals concluded. About the Q4 market state, how do you think about the price trend and market state?

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Deng: The price of magnesium ingot is in a decreasing trend due to oversupply in magnesium ingot main production areas. However, the demand of magnesium ingot is in a feeble state with gloomy economic environment. At the same time, magnesium industry is a new industry compared with other metal industries. Some flaws exist in manage idea and employees, which makes the demand and supply in an unbalance state. The price declining state restrains buyers entering market to make replenishment during this period. About Q4, as a producer, I hope that price of magnesium ingot could keep firm to promise proper profits for us. But, the market does not believe in tears, just fluctuates by the laws of the market. From this year's market perspective, magnesium ingot price shows ups and downs state. Even though we hope a purchasing high tide could turn on before Christmas Day, the market is still in a sluggish state. We could find that wait-and-see attitudes are popular among downstream buyers. From these aspects, we can see that the Q4 magnesium ingot market could not get better, deals hopeless better during that period, magnesium price will also in a low level with feeble demand at home and abroad.

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Asian Metal: Insiders anticipate that price of magnesium ingot in Shaanxi will drop to RMB17,500/t ex works. How do you think about this situation?

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Deng: From the market state, price of magnesium ingot will decrease to RMB17,500/t (USD2,800/t) ex works in Shaanxi soon with feeble demand. However, price of RMB17,500/t (USD2,800/t) ex works would be the bottom line. In Q4, many smelters will face to the financial problems, and producers have strong intention to recycle money back. Once price drops to lower than RMB17,500/t (USD2,800/t) ex works, the bottom line is hard to calculate. Considering this situation, magnesium ingot producers will try their best to hold RMB17,500/t (USD2,800/t) ex works to promise money back. In addition, China is a country which main area for magnesium production. If smelters could hold the offers in a relative proper level, some deals could be concluded at a proper price level. Downstream buyers will make replenishments now and then according to the relative stable price level rather than watch market continually. While if price of magnesium ingot moves down continually, buyers would like to watch the market continually. So the best way for us is to hold offers firmly to promise relative proper profits.

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Asian Metal: Compared with the materials in other smelters, what are the advantages for Jinxing Magnesium Company’s productions? How does your company stand up in magnesium industry?

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Deng: It is well known for us that voice for magnesium industry is in Shaanxi now. If we want to strive for a status in magnesium industry, we have to be outstanding and own some personalities that others don’t have, such as innovation, quality and credit. If we own these personalities, it could promise that we are winners in the industry. At present according to the market demand, more than 90% of materials in our company is high purity metal. It mainly due to that high purity magnesium ingot owns concentrated customer groups, high added value, and stable market. In order to strive for a vantage point in magnesium industry, we must have some special parts for the time being, and conform the demand from downstream buyers. Considering this situation, we involve high purity magnesium ingot, and also have some average products in our business scope.

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In addition, our company has a strong research and development team. We also spend a lot of energy to do research and development for downstream products to promise high quality, such as magnesium ingot, magnesium powder and magnesium alloy. At present, we mainly concern with some average magnesium alloy, such as AM50B and AZ91D. At the same time, some special type of magnesium alloy products are also included in our research category.

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Asian Metal: Do you have any plans about new products development? At the same time, what are your short-term and long-term development plans?　

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Deng: In short term, our company will devote to high quality and priority credit to satisfy the need from customers. In long term, we will move towards the new magnesium alloy direction development to adapt to the needs of other fields and expand market share proportion.

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Asian Metal: Currently some advantages highlight in Shaanxi area, as an outstanding magnesium plant in Shanxi, please introduce some advantages for your company.

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Deng: Shanxi Jinxing Magnesium Co., Ltd. was founded in October 1998 with registered capital of RMB23.8 million. Our company is a production and trade enterprise, and also owns self-supporting export right. In accordance with “science and technology are the forerunner, economic efficiency is the significant one” business principle beliefs, our company has grown to four enterprises, including two magnesium metal factories, a magnesium alloy factory and a reduction tank factory, and more than 90% products are entering the international market, such as Britain, the Netherlands, Germany, South Korea, Japan, Australia and other countries and regions.

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Secondly, the high quality product and integrity of sales creed are our enthusiastic support. From the current situation, Shanxi area is trapped in higher production cost and other limited factors, the advantages has transferred from Shanxi to Shaanxi area. However, relying on high products quality, good credit support, Shanxi Jinxing Magnesium Co., Ltd. stands out in the magnesium industry.

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Asian Metal: At last, what’s your expectations for magnesium market?

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Deng: Shanxi Jinxing Magnesium Co., Ltd. was built in 1998, and our company experienced ups and downs in magnesium industry. Volatile market conditions impacted a wide range of industries and market players in a variety of different ways; although many market participants closed with pessimistic attitudes, others entered the market with large sums of capital hoping to profit off of quickly emerging opportunities. Market teaches us how important time passes well products and inventory value, effective grasp the market direction, avoiding business risk. We also look forward to, magnesium city can have many the personage inside course of study hard and hard to deal with at the same time, the country can also pay attention to this emerging industry prospect and future, if have national support, the prospect of magnesium industry will go in the process of hard to see the darkest hour is that before the dawn. Shanxi Jinxing survived in such a tough environments. Market participants diligently work towards ways to maintain optimized inventory levels, better grasp market trends, and effectively manage risk; nevertheless, the inevitable questions continue to linger, how and when will global magnesium markets emerge from current stagnant market conditions? We also expect that our government could pay more attention to our magnesium industry, if so, magnesium industry will run better than now.

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Asian Metal: Thanks very much for your time and wish your company scale a new height!

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Deng: Thanks very much. On behalf of my company, I appreciate all the support from Asian Metal for so long a time.

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