Guangxi-based indium smelters reduce their output

As the indium industry has been seriously affected by the economic crisis, many smelters have suspended production. Smelters situated in Guangxi province, a major production basis supplying around 25% of indium metal among the whole country, reduce output by large margins.
A Guangdong-based exporter with the production capacity of around 25 tons per annum stated that they produce less indium this year than that of last year. "We produced around 18 tons in 2007 and the output has reduced to around 7-8 tons in the first ten months of 2008. We have continued reducing our output by around 30% since the beginning of November." How long the output reduction will take is not clear to them, as the production may carry out according to the market situation- the demand and the sales situation, according to the source.
The source revealed that many smelters in Guangxi have reduced their output by at least 30% since the recent several months when the financial crisis has started to hit China's indium market and demand becomes weaker and weaker and several others have fully suspend their production.
The source has signed a long-term contract with a Japanese buyer last year and they are also negotiating the long-term contract of 2009. The source revealed that the Japanese buyer has reduced their order of indium metal by 50%, but he does not reveal the exact volume of the purchasing volume. "It has been really difficult to reach a consensus on the contract price and we have concluded the contract now," said the source. They only delivered a bunch of indium metal in November and the contract was signed in September at USD570/kg and besides that they have no other deals in the recent two months.
Another exporter with a production capacity of around 50 tons also reduced their production this year by around 15%. The output of 2008 is around 30 tons and it was 35 tons in 2007. The exporter concluded not even one export deals in 2008 as they find the export prices are not satisfying.
A third Guangxi-based smelter who cooperate with a Hunan-based exporter to export indium also stated that they reduced their production this year by around 40%. Halting production in October, the smelter, with a production capacity of around 15 tons per year, is expected to produce around 7-8 tons of indium metal this year, down from 12-13 tons in 2007.
The source is very pessimistic about the indium market and he believes that the indium market may not turn warm in 2009. The source stated that many other small smelters in Guangxi province reduce their output of indium metal with some in Nandan having fully suspended production or running the production in half capacity. The source holds that the output of indium may continue to reduce in Guangxi and other provinces, which may do some help to the indium market, which the demand reduced by large margins due to the weakening global economy.