After the sharp rise in magnesium prices, the cliff decline is finally the norm-- Review and Prospect of magnesium Market in May

Review and Forecast of Market Price trend

Review of domestic Price trend

In May, the daily average price of magnesium in China fluctuated between 17500 yuan and 22200 yuan per ton, with an average monthly price of 19535.71 yuan per ton, an increase of 46.06 percent over the same period last year. After May Day, the spot price of magnesium market was tight, and the price of raw materials continued to rise. in particular, coal prices in Yulin area soared sharply, and magnesium prices also started a continuous rise model. in less than a week, the price of magnesium rose from 17600 yuan / ton to 20700 yuan / ton. in mid-May, magnesium price has rushed to 22200 yuan / ton. this price surge is mainly due to the sharp rise in raw material prices and the general rise in commodities, supported by costs. Magnesium production plants have raised their quotations for many times, while the overall market demand is strong, driving up the price of magnesium.

On May 19th, Premier Li Keqiang of the State Council presided over an executive meeting of the State Council, which issued arrangements to ensure the stability of commodity prices and maintain the smooth operation of the economy. Subsequently, the National Development and Reform Commission and other five departments jointly interviewed and reminded key commodity enterprises to take the lead in maintaining commodity market price order and not to collude with each other to manipulate market prices. with the release of the news, the magnesium market changed from bullish to bearish, and middlemen and traders no longer actively swept goods, but became mainly wait-and-see, and factories had to adjust prices in order to promote transactions. In late May, magnesium prices once fell to 17500 ~ 17800 yuan / ton, because the prices of raw materials such as coal and ferrosilicon are still high, coupled with less spot in the market, magnesium prices no longer continue to decline, magnesium prices rebounded slightly after low consolidation, and market sentiment was relatively optimistic. at the end of May, magnesium prices stabilized at 18000 ~ 18300 yuan / ton.

By the end of May, the mainstream quotations of manufacturers in Shanxi, Ningxia and Shaanxi were 18200-18300 yuan / ton, 18000-18100 yuan / ton and 18000-18100 yuan / ton respectively.

On the export side, FOB prices rose sharply in May compared with the previous period, with FOB monthly prices averaging US $3140.00 per tonne, an increase of 59.39 per cent over the same period last year. From January to May, the average price was 2586.58 US dollars per ton, an increase of 25.14 percent over the same period last year.

By the end of May, the export quotations of some manufacturers and traders ranged from US $2940 to US $2960 per ton of FOB.

According to SMM, June 21, the average price of magnesium ingots 9990 FOB (Tianjin Port) is 3155 yuan / ton.

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Review of the Price trend of International magnesium Market

American market

In May, the price of magnesium in the US market was relatively stable.

According to the report of American Metal Weekly, in May, the western spot price of US magnesium ingot remained stable at US $2.30 ~ US $2.35 / lb. the import price of US magnesium ingot traders increased to US $2.00 ~ US $2.10 / lb from US $2.00 ~ US $2.05 at the beginning of May. The price of die-casting alloy (trader) in the United States is stable at 1.80 ~ 1.90 USD / lb.

European market

Prices related to the European market rose sharply in May. In May, the British Metal Guide reported that the price of (MB) magnesium ingots rose, from $2750 ~ $2800 / ton at the beginning of May to $3130 ~ $3165 / ton, and to $3350 ~ $3420 / ton in late May. The European free market of (MW), an American metals weekly, rose from $2875 ~ $3025 / ton in early May to $3300 ~ $3400 / ton, and then rose again to $3400 ~ $3700 / tonne. At the end of May, prices returned slightly to close at $3350 ~ $3550 / ton. The price quoted by the Rotterdam warehouse of European strategic small metals rose from $2575 / ton to $3300 / ton.

Outlook for the future

In May, magnesium prices fluctuated greatly. After May Day, magnesium prices rose rapidly. In less than two weeks, the original magnesium prices rose nearly 5000 yuan per ton, and the market transaction price was as high as 22000 yuan / ton. Then, due to the control of national policy, bulk goods timely adjusted prices, magnesium prices plummeted, falling sharply to 17500 yuan / ton. At the end of May, magnesium prices gradually stabilized, and quotations in the main producing areas were basically controlled at 1.80-18300 yuan per ton. at this stage, coal prices showed no sign of falling. On the contrary, under the support of demand, prices still rose, and ferrosilicon prices were running firmly. Under the support of raw material costs, magnesium factories quoted prices firmly, and it is expected that magnesium prices will hardly fall in early June, although downstream customers do not have high acceptance of high-priced magnesium at this stage. Mostly wait and see, but the market spot inventory has been very low, rigid demand customers also gradually adapt to the current price and timely procurement, the contradiction between supply and demand is gradually alleviated, market participants are full of confidence in the future. Looking forward to June, in the case of relatively stable demand, the magnesium market as a whole will remain stable and firm. If raw material prices fall during this period, magnesium prices may be adjusted back.

Supply side

According to the preliminary statistics of the China Nonferrous Metals Industry Association, from January to April, China produced a total of 288300 tons of raw magnesium, an increase of 11.30% over the same period last year. Of this total, Shaanxi produced 197000 tons, up 17.29 percent over the same period last year; Shanxi produced 37300 tons, down 1.14 percent over the same period last year; and Ningxia produced 14100 tons, down 0.72 percent from the same period last year.

On the export side

According to statistics from the General Administration of Customs, from January to April, China exported a total of 157100 tons of magnesium products, down 3.32 percent from the same period last year, with a cumulative amount of US $427 million, an increase of 10.34 percent over the same period last year. Of this total, magnesium ingots exported 81500 tons, down 5.78 percent from the same period last year; magnesium alloy exports totaled 46200 tons, up 5.96 percent over the same period last year; and magnesium powder exports totaled 25500 tons, down 7.27 percent from the same period last year.

Related industries

Ferrosilicon market

In terms of the ferrosilicon market, the market atmosphere in May is positive, the spot in the ferrosilicon market is tight, and the factories are still dominated by order production, and the new round of steel bidding prices continue to rise. The rise in steel prices in steel mills has brought a lot of profit space to traders. At the same time, the production restriction policy of downstream steel mills has been relaxed, and demand is rising slowly. From the balance sheet of supply and demand, there is still a gap between supply and demand. The ferrosilicon market may continue to operate steadily at a high level.

Downstream market

In terms of the iron and steel market, according to the latest report released by the China material Union Iron and Steel Logistics Professional Committee, the PMI index of the domestic iron and steel industry in May was 46.1%, up 0.7% from the previous month. The sub-index showed that the prices of raw materials and steel fluctuated sharply in May, steel production increased, market demand slowed, and the speed of destocking of steel mills slowed down. It is expected that steel prices will remain slightly volatile in June, market demand will continue to be under pressure, and the growth rate of steel production will slow down.

In terms of the sponge titanium market, the high level of the sponge titanium market remained strong and stable in May. The sponge titanium market as a whole presents a prosperous situation of supply and marketing, the downstream demand remains strong, the production enterprises take orders stably, and the quotation is mainly stable, but some production enterprises have a certain willingness to push up the price. As far as downstream sponge titanium is concerned, the demand for military industry is still good, and the demand for titanium materials has also increased as a whole. industry insiders are full of confidence in the sponge titanium market, and it is expected that the sponge titanium market will be in stable operation for a period of time in the future.

In terms of the aluminum market, in May, enterprises began to increase and resume production one after another, and the early stage was affected by supply-side disturbances. As a result, the decline in production will gradually return to the position, and the output of electrolytic aluminum will rise again in accordance with the trend of previous years. On the demand side: the exit speed of processed products such as aluminum bars is accelerating week by week, and the terminal demand for real estate, Electroweb and home appliances has increased significantly, which still forms a certain support for aluminum prices, as the current aluminum price is high, it will also have an impact on the purchasing willingness of downstream rigid demand, it is expected that a pullback in subsequent aluminum prices will not be ruled out, but the overall electrolytic aluminum market will remain at a high level.