Home / Metal News / Minor Metals / [SMM Analysis] the pace of stopping production in the upper reaches of magnesium ingots accelerates the rise in prices and increases in demand.
[SMM Analysis] the pace of stopping production in the upper reaches of magnesium ingots accelerates the rise in prices and increases in demand.
May 22,2020 18:17CST
translation
Source:SMM
The content below was translated by Tencent automatically for reference.

SMM5 March 22: this week, the spot price of domestic magnesium ingots first fell and then rose, the overall fluctuation range is not large. From Monday to Wednesday, due to weak overall market turnover and lack of demand support, magnesium ingot prices continued to weaken, while continued price fluctuations also led to a lack of downstream purchasing enthusiasm. Although prices continue to decline, but the price reduction is not large. As of Wednesday, the mainstream transaction price of Fugu was 13000 yuan / ton, and Wenxi's mainstream transaction price was 13300 yuan / ton, which was 100 yuan / ton lower than that of last weekend, which shows that there is still a willingness to raise prices upstream. In the past two days from Thursday to Friday, due to the news of factory shutdowns and overhauling one after another upstream, the market activity of magnesium ingots increased, downstream enterprises began to purchase, the inquiry situation also improved significantly, there were large quantities of transactions, and market sentiment was more positive. as a result, magnesium ingot prices began to rise slightly on Thursday afternoon. As of today, the mainstream price of factories in Fugu area is 13,100mur13,200 yuan / ton, the mainstream transaction price is 13050 yuan / ton, a small amount is 13100 yuan / ton, and the transaction price of mainstream factory in Wenxi area is 13350 yuan / ton, which is 50 yuan lower than last weekend.

In terms of production, the upstream production plants have accelerated the pace of reducing production and stopping production. According to SMM research, at present, several companies on the market are ready to stop production, and those that have reduced production before continue to maintain the state of production reduction. There are individual factories currently only produce and sell 95B magnesium ingots, while the price of sponge titanium continues to fall since the Spring Festival, and the current mainstream market quotation of 56,000-6000yuan / ton is close to the cost line, so titanium factories are considering reducing production. 95B magnesium ingot market, which is already under sales pressure, poses a big challenge. At present, the overall market situation is not ideal, Lanchan is unsalable and the price is weak, and the demand for magnesium ingots is shrinking more and more seriously, while overseas markets have not yet seen a turnaround to open up exports, so in the following period of time, production reduction and shutdown is still the main consideration in the upstream.

On the demand side, due to the news of production cuts in the upstream on Thursday, prices rose slightly, and due to the psychology of buying up but not buying down, most of the stocks in the upper reaches of the river have been consumed, and there was a large number of purchases downstream on Thursday and Friday, resulting in an increase in overall trading volume. In the past two months, except for the transaction just needed, a large number of trading volumes in the magnesium ingot market are purchased periodically with price fluctuations, so the periodic increase in demand in a short period of time does not represent the improvement of the overall market.

According to SMM analysis, although the price has risen slightly, there is still a lack of demand to support the price. In a short period of time, the upstream production plant can only reduce production and stop production and control output to balance supply and demand in order to stabilize the price. It is expected that the follow-up market prices will be mainly stable and fluctuate slightly according to the actual situation of the market.

Price forecast
quotation
output
weekly review

For queries, please contact Frank LIU at liuxiaolei@smm.cn

For more information on how to access our research reports, please email service.en@smm.cn

Related news