[SMM Analysis] the Speed of production reduction and production restriction in the Upper reaches of magnesium Ingot speeding up the temporary Stability of Price

From Monday to Tuesday, magnesium ingot prices still maintained a downward trend, Tuesday Fugu area mainstream transaction price of 12800 yuan / ton, Wenxi mainstream transaction price of 13150 yuan / ton. The price of magnesium ingots closed temporarily on Wednesday as Shaanxi Shenmagan carbon Group issued a notice to reduce production and ingots. As upstream production shrank, it rose slightly on Thursday and Friday. As of today, the mainstream transaction price of 999 magnesium ingots in Fugu area is 13000 yuan / ton; Wenxi 999 magnesium ingot mainstream quotation 13400-13500 yuan / ton, factory mainstream transaction price 13400 yuan / ton.

On the supply side, upstream manufacturers of magnesium ingots have increased their production limits this week. Due to the serious unsalable of blue carbon, many blue carbon production enterprises have begun to lose money. On Wednesday, the Magnolia carbon Group ordered its subordinates to take the initiative to stop production and limit production insurance prices, and the supply of coke oven gas will also be reduced. Superimposed on the current magnesium ingot price can not support the cost, upstream producers began to reduce production began to increase, according to SMM research, 30% of the magnesium ingot manufacturers have begun to limit production, the limited output of each enterprise is about 30%-50% of the normal output.

On the demand side, first of all, export is still facing great difficulties, magnesium ingot export orders are only 20 to 30% of the previous; magnesium alloy, magnesium powder export orders are fully delayed, is expected to improve after the second quarter. Secondly, the domestic downstream demand has increased with the improvement of the resumption of work and production, but it is still mainly in urgent need, and the sales of end products are particularly important.

SMM analysis, upstream manufacturers have reduced production to a certain extent to ease the pressure on the magnesium ingot market, and the previous factory low prices also consumed most of the inventory, however, in the case of slow release of domestic demand and export downturn caused by the epidemic abroad, it is also difficult for prices to continue to rise, and it is expected that the price of magnesium ingots will be stable next week.