Magnesium Price fluctuation increases the contradiction between supply and demand-- Review and Prospect of magnesium Market in November

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Review and Forecast of Market Price trend

Review of domestic Price trend

In November, the daily average price of magnesium in the domestic market fluctuated between 30700 yuan and 38200 yuan per ton, with an average monthly price of 33983.33 yuan per ton, up 159.91 percent from the same period last year. From January to November, the average price was 23321.62 yuan per ton, an increase of 74.21% over the same period last year. At the beginning of this month, the supply of raw magnesium in the market increased, gradually from insufficient supply to oversupply, there was little demand from downstream users, and the overall sales were hindered. At the same time, coal prices fell, and in the absence of cost support, enterprises in the main producing areas lowered their quotations one after another, and the price fell below 31000 yuan / ton. Near the middle of the year, the news of receiving reserves came out in northern Shaanxi, the market confidence of magnesium enterprises was boosted, the quotation stabilized, and the downstream procurement was still dominated by rigid demand, which did not improve significantly. In the middle of this month, supported by the storage policy, the factory shipped smoothly, the warehouse dropped obviously, the factory was full of confidence in the future, the quotation was firm and upward, and downstream users no longer continued to wait and wait and actively entered the market for purchases. In the following week, the spot market was in short supply again, the factory opened the futures order production mode, and the magnesium price rose sharply in a row. The price of the factory in the main producing area of Shenfu has exceeded 38000 yuan / ton, and the transaction price is not less than 37000 yuan / ton. In the last ten days, as the downstream customers completed the replenishment one after another, the high-priced magnesium was no longer accepted, the market transaction slowed down, and the market quotation no longer rose and fell, while the inventory of enterprises in the main producing areas was at a low level at this time. Some enterprises still maintain the futures order production mode, although the magnesium price has fallen, but the range is very small, and both sides of supply and demand are in a short stalemate. During the week at the end of the month, the magnesium market was relatively chaotic and the quotation fluctuated greatly, fluctuating between 33000 yuan / ton to 36000 yuan / ton. The weak demand downstream and the shortage of spot goods in the factory affected the market one after another. It is believed that under the running-in of the upstream and downstream market, there will be a reasonable control over the market, and eventually the magnesium price will still tend to be stable.

By the end of November, the mainstream quotations of manufacturers in Shanxi, Ningxia and Shaanxi were 35500-36000 yuan / ton, 35000-35500 yuan / ton and 35000-35500 yuan / ton respectively.

On the export side, FOB prices fell somewhat in November compared with the previous period, with an average monthly price of US $5426.11 per tonne, up 161.42 per cent from a year earlier. From January to November, the average price was $3716.92 per tonne, up 84 per cent from a year earlier.

By the end of November, some manufacturers and traders quoted FOB at US $5610-US $5740 per ton.

Review of the Price trend of International magnesium Market

American market

According to Metals Weekly, the western spot price of magnesium ingots in the United States fell from $6.75-$8.50 / lb in early November to $6.75-$7 / lb in early November. The import price of magnesium ingot traders in the United States fell from $6.75-$8.50 / lb at the beginning of the month to $6-7 / lb. The price of US die-casting alloy (trader) fell in November from $6.25-$7.50 / lb at the beginning of the month to $5.50-$7.30 / lb in the middle of the month, with a slight correction at the end of the month to close at $5.50-$7.50 / lb.

European market

The price of (MB) magnesium ingot fell sharply in November. At the beginning of the month, the price was $13000-$160 million / ton. In the middle of the month, it fell to $6000-$10000 / ton, followed by price shock adjustment, closing at $7000-$8000 / ton at the end of the month. The European free market price of the US "Metal Weekly" (MW) fell from US $7100-US $9500 / ton at the beginning of the month to US $6000-US $8000 / ton in the middle of the month. At the end of the month, the price recovered slightly to close at 7000-8000 yuan / ton, while the price quoted by the European strategic small metal Rotterdam warehouse rose from US $4700 / ton to US $9500 / ton.

Outlook for the future

In November, there was not much demand downstream of the magnesium market, but the spot of the factory was more tight. The factories in the main producing areas had different views and differences on the trend of the market, and the quotation fluctuated sharply. In December, there was news that the Ministry of Ecology and Environment will launch a new round of environmental protection inspectors to carry out one-month inspection work in Shaanxi and Ningxia. During this period, it is not ruled out that some enterprises will stop production, reduce production, and so on. Downstream enterprises are also worried that the spot market will be tight again, and adopt the way of centrally issuing orders to replenish the stock, or support the magnesium price in the short term. As the overall downstream demand is not prosperous, as the replenishment is completed, it will gradually turn to wait-and-see, the market or the production price has no market, and the enterprises in the main producing areas may offer profits. If the situation of tight spot and low inventory is not significantly improved, the profit margin of the factory will not be larger. Mainly will be strong, to a large extent, the market will maintain a high and strong operation.

Supply side

According to incomplete statistics of the magnesium Branch of China Nonferrous Metals Industry Association, from January to October, China produced about 744200 tons of raw magnesium, of which Shaanxi produced about 455700 tons, Shanxi produced about 162300 tons, Inner Mongolia produced about 38000 tons, and other areas produced about 65000 tons.

On the export side

According to statistics from the General Administration of Customs, from January to October, China exported a total of 371800 tons of magnesium products, an increase of 18.11 percent over the same period last year; the cumulative amount was 1.243 billion US dollars, an increase of 66.12 percent over the same period last year. Of these, magnesium ingots exported 214200 tons, up 31.33 percent over the same period last year; magnesium alloy exports totaled 87100 tons, up 2.59 percent over the same period last year; and magnesium powder exports totaled 61100 tons, up 11.7 percent over the same period last year.

Related industries

Ferrosilicon market

In November, the overall trend of ferrosilicon was weak, the price dropped continuously from 14000 yuan / ton at the beginning of the month, and dropped to 9500 yuan / ton at the end of the month. In December, the price of thermal coal rose, the coking coal market also showed a downward trend, the operation of black fuel was weak, the spot price of ferrosilicon was adjusted back, and the price and purchase volume of steel were announced in various localities. Some manufacturers and traders sold spot goods at low prices, and market confidence was frustrated and operated under pressure. The rise in steel prices in December is not expected, and the downstream steel demand will also run low with the arrival of the heating season, so in the long run, the ferrosilicon market may continue to be weak.

Downstream market

In terms of the iron and steel market, according to the latest report released by the Wulian Iron and Steel Logistics Professional Committee, in November, the PMI of China's iron and steel industry was 36.6%, down 1.7% from the previous month, and the iron and steel industry continued to run weakly. The sub-index shows that as many places enter the winter this month, the overall market demand is poor, and steel production continues to decline under the influence of policies such as environmental production restrictions and flat production restrictions. The cost of raw materials has dropped significantly, and the price of steel has also gone down all the way. It is expected that in December, the steel market will continue to operate at a low level, supply and demand will continue to weaken, raw material prices may stabilize and pick up, and steel prices will fluctuate slightly.

In terms of the sponge titanium market, from January to November, the output of sponge titanium was about 127000 tons, an increase of about 25% over the same period last year, and an increase of about 25000 tons over the same period last year. The sponge titanium market has rebounded this month compared with last month, but it has not yet met expectations, the overall market is understarted, and the overall demand in the downstream market is poor, especially in the civilian sector, and the market is weak. In terms of raw materials, although the magnesium price fluctuated greatly in November, it did not cause an obvious shock to the sponge titanium market. Users' acceptance of high-price sponge titanium is very low, and the market is in a weak and stable situation.

In terms of the aluminum market, in November, the market supply and demand were both weak. Although the smelters resumed production one after another, they could not provide output support for the market. The demand at the downstream was off-season, and the overall demand remained weak. Inventory, LME inventory has been at the lowest level in nearly 10 years, aluminum prices may play a support, aluminum prices at this stage may maintain a volatile trend.