Market trend of magnesium market in 2020
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In 2020, the price of magnesium ingot will be in a downward trend. According to the data of the business agency, affected by the epidemic situation in mid February, domestic transportation was blocked, and it was inconvenient to trade. The manufacturers sold the products in advance, and the price was mainly quoted. After the price rose sharply, with the real trading operation, affected by the poor overseas shipment, the domestic magnesium ingot price continued to move down. From March to April, the prices of most domestic bulk commodities went out of the “epidemic pit”, and the prices of magnesium ingots failed to follow the upward trend and moved down all the way. In mid September, the price of magnesium ingot began to stabilize.
The main reason for the decline of magnesium price
1. The exit is not smooth
The export proportion of magnesium ingot is relatively large, and the influence factors of external environment on magnesium ingot price are relatively large. According to relevant data statistics, China will export 452000 tons of various magnesium products in 2019, accounting for 46.6% of magnesium output.
2. The price of nonferrous metals is relatively high in the early period
The price of magnesium was high in 2017 / 2018, and did not follow the downward cycle of base metals. In 2019, the ladder decline mode was started, lagging behind non-ferrous metals.
Main reasons for recent stabilization
1. The price falls to a low level
On October 4, the magnesium commodity index was 75.41, flat with yesterday, down 34.10% from the cycle high of 114.43 (2012-08-01), and 3.76% higher than the lowest point of 72.68 on January 10, 2016. (Note: period refers to 2012-03-01 to now)
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In other words, the current price is near the historical low, and the downward space is narrowed.
According to the analogy lag theory, the price of magnesium ingot lags behind the nonferrous metal plate for 1-2 years, and the nonferrous metal has hit the bottom and rebounded
On October 4, the nonferrous metals index was 901 points, unchanged with yesterday, 10.35% lower than 1005 points (2012-01-31), and 48.43% higher than the lowest point 607 on November 24, 2015. (Note: period refers to 2011-12-01 to now)
The price of magnesium ingot has a large upward space.
2. Output moves down
According to the statistics of China Nonferrous Metals Industry Association, from January to July 2020, China’s Communist magnesium reached 465400 tons, a year-on-year decrease of 3.66%.
Supply and demand side impact factors move down, cost side impact factors rise
In the early stage, the market price of magnesium ingot dropped to 12100 yuan / ton, and the profit margin of magnesium enterprises fell to the limit. Based on the consideration of cost side factors, domestic mainstream manufacturers have a sharp increase in willingness to support prices, and the influence of cost factors on prices is gradually enlarged. Different from profitable situations, the supply-demand side market is weak, which benefits buyers in the long short game, and the influence of supply-demand factors on prices is weakened in the near future.
In October, the price of magnesium may enter a period of shock platform
Based on the current low price of magnesium ingot, the profit has fallen, the willingness of manufacturers to support the price has risen, and the downward space has been narrowed. Ye Jianjun, an analyst at the business agency, believes that the price of magnesium in October may fluctuate the platform period, reaching the bottom and waiting to rise.
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