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[SMM analysis] the upper reaches of magnesium ingots are forced to raise the cost downstream of magnesium ingots.
Jul 24,2020 18:29CST
translation
Source:SMM
Early ferrosilicon coal prices have risen one after another, although it has begun to fall gradually, but the increased cost of magnesium ingots does cause some pressure to upstream factories, upstream adhere to the price; and traders and part of the downstream said that the recent domestic downstream orders significantly reduced, and now it is time for the European region to have summer vacation, so exports are also more difficult, and the market supply and demand imbalance is obvious, more that the price may continue to decline.
The content below was translated by Tencent automatically for reference.

This week, the spot price of domestic magnesium ingot remained stable, and the overall transaction eased, but the sluggish price still reflects weak demand. As of today, the transaction price of 999 magnesium ingots in Fugu area is 12800Mub 12850 yuan / ton, and the mainstream price is 12850 yuan / ton; the mainstream transaction price in Wenxi area is 13,100mur13,200 yuan / ton, which is the same as last Friday. Some factories in the upper reaches said that the price was already at the cost line of most production plants, and that a further drop in the price would be a loss, so it would not be shipped if it was less than 12850 yuan / ton.

Magnesium ingot factories in Fugu region said that orders from traders have decreased significantly recently, while orders from downstream factories with actual demand are relatively stable. According to a survey conducted by SMM, traders in Wenxi region said that there has been a marked decrease in domestic downstream orders recently, and now it is time for summer vacation in Europe, so exports are also more difficult, and there is an obvious imbalance between market supply and demand, and most of them think that prices are likely to continue to decline.

SMM analysis, in the current export hindrance, downstream overall demand reduction, upstream production reduction is not strong, market inventory gradually increased, supply and demand imbalance environment, there are no positive factors that can support the price in the short term, so the price is still difficult to rise. However, the price of ferrosilicon coal has risen one after another, although it has begun to decline gradually, but the increase in the cost of magnesium ingots does cause some pressure to the upstream factories, and the room for price reduction is limited, so the upstream will still maintain the price. SMM expects magnesium ingot prices to remain stable in the short term and may fluctuate slightly.

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