Shi Huaze optimistic about the power battery industry

On the morning of March 23, Huaze, CEO of Vale in Brazil, accepted an exclusive interview with the "Securities Daily" reporter and talked about the company's iron ore development and future will reduce its dependence on iron ore and increase investment in other basic metal products. topic.

In this interview, Vale CEO Huaze told the "Securities Daily" reporter: "2017 is a turning point for Vale. We have embarked on ambitious changes in productivity, cost management and corporate governance. We have laid the foundation for a more diversified source of cash, and we will improve our existing asset base and reduce our dependence on iron ore. We are working to transform Vale into a predictable company. "

Regarding the claim of reducing the company's dependence on iron ore, Huaze explained: "To reduce its dependence on iron ore, it is not to reduce its production. This production will continue to increase. But vale will increase investment in other basic metals, such as nickel, cobalt and copper. "

` Our success in the past many years has been dependent on the iron ore business, 'Mr. Huaze told Securities Daily. But it's not good if the company is completely dependent on a particular product, such as iron ore. "

"Because of the volatility of the iron ore market, sometimes prices are high and sometimes prices are low. If the company depends on a particular commodity, it has a potentially negative impact on the overall financial situation. "When Huaze said so.

Vale will increase its investment in metals such as nickel, cobalt and copper, mainly to match the rise of the electric car market and the battery market, according to an interview with the securities daily.

"In the next few years, the market for electric vehicles, batteries and, in particular, the market for electric vehicles and batteries in China will develop considerably in the future. The raw materials it needs, such as nickel, cobalt and copper, are very important," said Huaze. So the future development of electric cars will certainly have a positive impact on our basic metal business. "

Although Vale has targeted its investment in the production of raw materials for electric vehicle batteries such as nickel, cobalt and copper, Vale's 2017 annual report found that the company's production of nickel did not increase in 2017. But less. Vale produced 288,200 tons of nickel in 2017, down 7.3 % from 2016, according to the data.

In response, Huaze explained to reporters that the company did not increase nickel production mainly because of low prices.

"The price of nickel in 2017 is too low to make plans to increase production. "Huaze said that because the market price of nickel is challenged by low nickel pig iron, the price of nickel is currently only 13,000 US dollars per ton. At this low price, we can not further expand production. "

According to Huaze, "The market price of nickel fluctuates greatly, reaching a maximum of 50,000 U.S. dollars per ton, and when the price is low, it is even as low as 9,000 U.S. dollars per ton. At a particularly low price, a new product appeared in the Chinese market, abbreviated as NPI, which is actually a low nickel pig iron. Low nickel pig iron is a solution offered to steel mills to replace high-quality nickel products. This actually depressed the price of nickel and reduced the price of nickel to a very low level, and many nickel mines could not be sustainably mined. "

It is understood that nickel is divided into two types, one is a high-grade nickel, which can be said to be grade one. There is also a low quality nickel, which can also be said to be second-grade nickel. Among them, the first grade of high-quality nickel is suitable for the production of electric car batteries. There is also a second grade nickel that is not very demanding, including low nickel pig iron, which is used by steel mills.

"There is a difference in prices at the moment, otherwise the price of the high-quality nickel needed for battery production would be depressed. At the time, Huaze told reporters that a type of product must be subject to higher prices before it is possible to continue to increase production. Vale has enough nickel resources and reserves. Once the market is ripe, if the market price is right, we can quickly increase nickel production.

Huaze believes that the current new normal is very good for us. I don't want the price of the product to be particularly high or very low. We hope the market can reach a balanced and stable situation, which will benefit both our supply and demand. "The nickel market now needs a good solution to the healthy development of the high quality nickel needed for electric car battery production. "

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