As I said forget Wang, listen to Chen...................
Mr. Chen: Comparatively speaking, I myself as a member of Fugu Magnesium Association have more access to statistics related to the magnesium industry. I think that magnesium prices in 2018 reflected the real value of magnesium products. It has been well known that since 2013 a large number of magnesium companies, out of downward economic pressure, have been forced to suspend production or cut outputs, and some large-sized producers were even forced to exit the market for ever. How many of the former top five producers are still active in the magnesium market now? And the total output of the current top ten magnesium metal producers is smaller than that of the former top three producers. In sum, China's magnesium metal production capacity has shrunk to a quite serious extent. Moreover, statistics on magnesium capacities in Fugu and Shenmu have been exaggerated. For example, affected by quite low magnesium prices in the previous years, some magnesium producers have left the market. In Shenmu where there are totally 11 magnesium plants licensed by government, only five are able to maintain full-year operation in the recent five years, while in Fugu there are only 26 plants in operation now out of the total 34 licensed magnesium plants. And plants which are in operation are unable to run at their full capacities either. Moreover, owing to characteristics of the magnesium market itself, statistics on magnesium metal outputs in the major Chinese magnesium production regions are not very accurate, with the actual annual statistics far below the official ones. At the same time, rigid demand for magnesium metal always exists; and together affected by increasing demand from industries such as aluminum alloy, magnesium alloy and steel desulfurization as well as by environmental inspections, supply of magnesium metal has been tight and its prices kept rising. We can't attribute increasing magnesium prices all to environmental factor. Actually, China does not have a very big magnesium metal output at all.
Mr. Chen: Today, environmental protection is an inevitable obligation that a commercial company can't dodge. You must comply with it and must do it well. For Fugu local magnesium industry which has adopted the development principle of comprehensive utilization of resources and of cultivating circular industrial chain, if we can realize sanitized production and green development, I believe that we can see a very prosperous future ahead. So we should not attach too much importance to losses or gains of a moment.
Mr. Chen: Back to the year of 2003, Fugu was among the earliest ones to adopt the practice of integrating magnesium metal production into comprehensive resources utilization and circular industrial chain. And Tianyu Group's first magnesium company, Xiyuan Chemicals, was one of the earliest magnesium plants in Fugu. 2008 was an important year when the Fugu magnesium industry underwent rapid growth, and since then the whole world got to know the Chinese county Fugu and its magnesium industry. As a member of the Fugu magnesium industry, Tianyu Group re-identified itself in 2017 as a magnesium metal producer. We will focus upon magnesium metal production and produce products that better meet customers' need
Mr. Chen: As Executive Director of Shaanxi Magnesium Industry Association and as Director of Fugu Magnesium Association, I am concerned the most not about impacts from environmental inspections, nor raw material supply, but lacking of talents. Located in northern Shaanxi, a remote region in China, Fugu and Shenmu magnesium communities quite lack talents, especially high-end talents. Talented professionals are reluctant to come to our county but at the same time, our local magnesium industry is in urgent need to undertake technical upgrading in terms of automation, mechanization and even intelligentization. Lacking in expertise has seriously stymied our development. So the biggest challenges Fugu magnesium industry will face in 2019 will be technical upgrading and reforming on the industry, instead of pricing alliance. The right of pricing should go back to the market and clients, and we do not want to and will not control the market. Instead, we will encourage our member companies to sharpen our competitive edges by saving costs, improving efficiency, enhancing management skills and cutting consumption. We will work hard and join our counterparts in the rest of China in welcoming a more prosperous tomorrow for the magnesium industry.
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