Magnesium price continues to rise and the market is a mixed blessing-- Review and prospect of magnesium market in August

Review and Forecast of Market Price trend

Review of domestic Price trend

In August, the daily average price of magnesium in China fluctuated between 21100 yuan and 29500 yuan per ton, with an average monthly price of 23472.22 yuan per ton, up 80.19% from the same period last year. The average price from January to August was 18127.69 yuan per ton, up 33.32% from the same period last year. At the beginning of August, the market was relatively stable, the factory stock was insufficient, and at the same time, the quotation was strong under the support of the high cost end, while the acceptance of downstream users was limited in the face of high prices of magnesium ingots, mainly to wait and see carefully, and the market transaction was limited. Under the game between supply and demand, the price of magnesium remains stable for the time being. In early August, the spot market is still tight, factory order production, the sales model is mainly futures pre-sale, downstream users a small amount of rigid demand replenishment, trading volume rebounded slightly, magnesium prices rose slightly, the market quotation is 21500-21800 yuan / ton. In mid-August, under the influence of the rising prices of coal and ferrosilicon raw materials, the price of magnesium continued to rise, and the market has been in a state of out of stock. Some enterprises in the main producing areas are still in a state of maintenance, which is still in a state of suspension of production, and the supply side is tight. Downstream users are worried that prices will rise in the later stage, and a small amount of replenishment is also in due course. The market is running strongly at high positions, and magnesium prices have risen sharply. Near the end of August, due to the rapid increase in magnesium prices and the increasing pressure on the cost of raw materials for processing enterprises, they began to gradually reduce enquiries and slow down the pace of procurement; due to weak transactions, the market experienced a short period of high consolidation, and quotations fell slightly, but due to the shortage of coal on the market and the rising price of ferrosilicon, the magnesium market is still full of confidence. In mid-August, magnesium prices closed at 21100-29500 yuan per ton. In late August, magnesium prices rose sharply, even by more than 1,000 yuan a day. On the one hand, smelting enterprises are affected by substantial increases in ferrosilicon and coal prices, and their costs are high; on the other hand, due to production restrictions on environmental protection, the spot market is tight, downstream rigid demand procurement, magnesium prices have increased significantly, downstream customers face the accelerated rise of magnesium prices, the cost pressure is so great that they can only reduce purchase orders, while some processing enterprises have no choice but to stop work and reduce production, which is disadvantageous to the promotion of the magnesium market. At the same time, the magnesium Branch of China Nonferrous Metals Industry Association also puts forward proposals to promote the healthy development of the magnesium industry in order to stabilize the original magnesium quotation and promote downstream consumer demand.

By the end of August, the mainstream quotations of manufacturers in Shanxi, Ningxia and Shaanxi were 29400-29500 yuan / ton, 29200-29300 yuan / ton and 29200-29300 yuan / ton respectively.

On the export side, FOB prices rose sharply in August compared with the previous period. The average monthly price of FOB in August was 3724.44 US dollars / ton, up 89.06 percent from the same period last year. The average price from January to August was 2901.00 US dollars per ton, up 43.17% from the same period last year.

By the end of August, the export quotations of some manufacturers and traders were between US $4630 and US $4650 per ton of FOB.

Review of the Price trend of International magnesium Market

American market

The price of magnesium rose slightly in the US market in August.

According to the American Metal Weekly, the western spot price of US magnesium ingots remained stable at $2.10-$2.30 / lb in July, while the import price of US magnesium ingot traders rose slightly from US $2.02-US $2.10 / lb to US $2.05-US $2.15 / lb in July. The price of US die-casting alloy (trader) rose from $1.85-$1.95 / lb to $1.87-$2.00 / lb in July.

European market

Prices in the European market rose sharply in August.

In August, the British Metal Guide reported that the price of (MB) magnesium ingots rose sharply, from $3600-$3700 / ton at the beginning of August to $3900-$4000 / ton. At the end of July, it rose sharply to US $4300-US $4625 / ton; the European free market price of US Metal Weekly (MW) rose sharply to US $4100-US $4500 / ton in June from US $3650-US $3750 / ton at the beginning of the month; and the price quoted for strategic small metals in Rotterdam in Europe remained stable at US $3550 / ton.

Outlook for the future

In August, the magnesium market rose sharply, the pressure of downstream enterprises increased sharply, the market fear of heights intensified, demand-side procurement will be more cautious, and even take measures to reduce production, reduce demand for raw materials, market trading volume declined, played a restraining effect on the rapid rise of magnesium prices, magnesium prices may be temporarily rising, high consolidation occurred, but in the later stage, under the influence of environmental protection upgrading and energy consumption, The output of magnesium smelting enterprises will decrease again, and the shortage of spot stock in the market is difficult to improve for a while, coupled with the high support of ferrosilicon and coal, magnesium prices are not easy to fall in the short term, and both sides of supply and demand will continue to be in a high-level game and stalemate. Follow-up magnesium prices are still easy to rise and difficult to fall. It is expected that the future will continue to run at a high level, or there may be a slight pullback.

Supply side

According to preliminary statistics from the China Nonferrous Metals Industry Association, from January to July, China produced 494100 tons of raw magnesium, an increase of 4.55 percent over the same period last year. Of this total, Shaanxi produced 344200 tons, up 12.30 percent over the same period last year; Shanxi produced 68700 tons, up 0.58 percent over the same period last year; and Ningxia produced 13400 tons, down 50.35 percent from the same period last year.

On the export side

According to statistics from the General Administration of Customs, from January to July, China exported a total of 268600 tons of magnesium products, an increase of 17.40 percent over the same period last year; the cumulative amount was US $762 million, an increase of 40.33 percent over the same period last year. Of these, magnesium ingots exported 150500 tons, up 20.50 percent over the same period last year; magnesium alloy exports totaled 68000 tons, up 21.65 percent; and magnesium powder exports totaled 43400 tons, up 10.43 percent over the same period last year.

Related industries

Ferrosilicon market

In the ferrosilicon market, in August, the ferrosilicon market continued to operate at a high level, the spot supply of production enterprises is still in a tight state, some factories do not have spot, mainly order production, steel prices show an upward trend. The price of ferrosilicon raw materials is high and firm. In addition, the production restriction policy in Inner Mongolia and the power restriction policy in Ningxia are constantly upgrading, and the market is bullish. At the same time, the price of magnesium metal has increased greatly, and there is still a lot of room to rise in the future under the influence of multiple favorable conditions.

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 August, the PMI of the iron and steel industry was 41.8%, down 1.3% from the previous month, and the downward pressure on the iron and steel industry increased. The sub-index shows that with the implementation of the production restriction policy this month, the slowdown in iron and steel production has led to a reduction in iron ore purchases and a drop in prices; the epidemic and off-season factors have led to a decline in market demand, and steel prices have fallen accordingly. It is expected that steel demand may enter the peak season in September, but production will continue to be tight under the guidance of the policy. Steel prices are expected to rise moderately, and raw material costs may rise.

In the sponge titanium market, the rising magnesium price continues to increase the cost of sponge titanium manufacturers, and the profits of sponge titanium manufacturers continue to be transferred to the raw material end. The transaction price of sponge titanium has been in a stalemate stage, and price increases have been blocked frequently. August-September is the traditional off-season of the titanium industry. Civil demand in the market has decreased, orders are insufficient, while the demand in the field of military industry is still strong, and the market and enterprises show a phenomenon of two-tier differentiation. In August, The quotation of domestic sponge titanium production enterprises is 70, 000 yuan / ton, most of the transaction price is less than 70, 000 yuan / ton, and some of the transaction price is less than 65000 yuan / ton.

In the aluminum market, in August, the average price of aluminum ingots was 19874.3 yuan / ton, up 431.2 yuan / ton, or 2.2%. On the one hand, the rise in aluminum prices is due to the fact that after production restrictions in places such as Inner Mongolia and Yunnan, areas such as Guangxi and Guizhou have also begun to limit electricity and production, and the later tightening trend at the supply side has become more obvious, which is good for aluminum prices; on the other hand, the spot market in some areas is tight, the supply of goods is tightened, at the same time, downstream users are more willing to buy, the market transaction situation has improved, market confidence has been boosted, and aluminum prices have been boosted. In terms of the current form, the current situation of insufficient spot supply in the market will continue for several weeks, and aluminum prices are expected to maintain a high volatility trend in the later period.