Asian Metal: Thanks for taking our interview. Would you please first give a brief introduction on your company and main businesses?

Mr. Zhang: HCS Jiangwu Special Tungsten (Ganzhou) Co., Ltd. was formed in 2014 as a joint venture between Jiangxi Tungsten Holding Group and the German company H.C. Starck (HCS), and we own an existing annual production capacity of 3,500t of tungsten metal powder. On June 9, 2020, MHT announced completion of its global acquisition on H.C. Starck's tungsten business. HCS is a globally leading provider of high-tech tungsten products including tungsten metal powder and tungsten carbide powder, and we serve clients around the world via our production bases in China, Europe andNorth America. Though the COVID-19 epidemic lingers around the world, our Ganzhou plant maintains full-capacity operation and adopts strict inspection on product quality and performance so as to ensure that our products meet clients' demand. At present, our products are mainly used in cemented alloy production with end users coming from a wide range of industries such as electronics, chemicals, automobile, pharmacy, aviation, energy and environmental technology.And we also provide service to engineering companies and tool manufacturers.

Asian Metal: How do you think of end demand for tungsten carbide powder in 2021?

Mr. Zhang: From an overall perspective, I think that market demand for tungsten carbide powder in 2021 is strong. Our company maintains full-capacity production of tungsten powder and tungsten carbide powder through out 2021. Our annual production in 2021 is 3,500t, while our existing annual production capacity is 3,500t too. Given specialties of our products, we have been the main supplier of medium and high-end tungsten products with supply and demand for our products staying at balance. In addition, as demand from the Japanese and South Korean markets gradually recovered after Q22021, our exports increased accordingly. In 2021 our tungsten powder exports grew by about 30% from in 2020. For the year ahead, if we do not consider theCOVID-19 influences, we believe that tungsten powder prices would move up as a result of rising raw material prices in China.

Asian Metal: How does your tungsten carbide powder export business go in 2021?

Mr. Zhang: With the global economy slowly recovering under theCOVID-19 background, demand for tungsten metal powder grew gradually in 2021. In 2021 our tungsten powder exports grew steadily, up by nearly 30% from in 2020.Of our 3,500t tungsten metal powder production in 2021, sales in the Chinese domestic market amounted to about 70% and exports to overseas markets amounted to 30%.Our exports were nearly 1,100t in 2021, compared with only around 600t last year. And to be more specific, our exports to Southeast Asia in 2021 were about60% of the annual total and exports to Europe and America about 40%. We believe that in 2022 our exports are expected to remain steady with potential increases to be achieved.

Asian Metal: Over the recent years, the Chinese tungsten carbide powder export market sees fierce competition. What do you think are your main advantages in the competition?

Mr. Zhang: I think that our biggest advantage is that we are able to maintain product quality and service. Firstly, we can ensure steadiness in our product quality including particle distribution and high purity, etc.Secondly, we try our best to provide value-added service to our clients by helping them choose high-quality products and make better use of our products. As we adopt a direct-sale mode in our export business, our clients are able to enjoy steady product supply and steady service. Moreover, we have our own global sales network consisting of broad sales channels and steady client bases. Further considering product quality resulting from our century-long history, more and more clients who pursue high quality prefer to choose our products.

Asian Metal: Since beginning of the third quarter, tungsten carbide powder prices in China showed an upward trend on the whole. What do you think are the main reasons?

Mr. Zhang: I think there are two reasons for price increases since Q3. One is the rational rebounding trend in price itself and the other is increase in upstream raw material prices. In 2021, tungsten carbide powder prices moved up by 8%-10% on the whole. In 2021, strict environmental policies in China led to limited raw material supply on the whole, so upstream raw material suppliers showed strong intention to holdback from selling. As prices for raw materials tungsten concentrate and APT 88.5%min rose by around 20%, tungsten powder prices moved up accordingly. In addition, with the COVID-19 epidemic effectively controlled around the world in 2021, demand from the cemented carbide industry gradually recovered. Though in Q3 andQ4 demand from the cemented carbide market shrank to some extent, overall market demand was still stable, which formed sound support to increases in tungsten powder and tungsten carbide powder prices.

Asian Metal: As a number of producers in China successively expanded production over the recent years, tungsten carbide powder supply in China grew on the whole. How do you think of supply status in the current tungsten carbide powder market?

Mr. Zhang: I think that the existing supply-demand relation is relatively clear. Excluding influences from surplus production capacity, theChinese domestic market shows balancing demand for tungsten carbide powder, especially thanks to de-stocking drive by suppliers in previous years. But as some producers kept expanding production, tungsten carbide powder supply on the Chinese domestic market keeps growing. But the reality on the Chinese market now is that more and more products are provided to medium and high-end consumers mainly as a result of industrial upgrading and uncertainties in the overseas market under the COVID-19 background. From the end market perspective, there are not many varieties of cemented carbide on the existing market able to be provided to end users, and some cemented carbide producers even choose to purchase from outside to meet their demand for high-end raw materials. Our company, clinging to a business strategy of quality and service differentiation, has a full range of powder products covering nano-grade to ultra-fine particles with standard particle size of 2.5-4.0m2/g, submicron to micron-grade powder with standard particle size of 0.4μm-2.5μm, and ultra-large powder with standard particle size of 2-40μm. Our industrial chain shows higher and higher requirements on steadiness of product quality.

Asian Metal: What is you future development plan? Do you have further research and production expansion plan？

Mr. Zhang: For the time being, our Ganzhou plant has no expansion plan. On the basis of optimizing product quality and ensuring steady operation, we attach more importance to customizing products and solutions which are better able to meet client demand. And maintaining close cooperation with our core clients and further enhancing our value-added service has been always our mission.

Asian Metal: Thanks again for taking our interview. Wish your company better and better!