According to the monitoring of the Commodity Market Analysis System of Shengyi Society, the magnesium ingot market in Shaanxi Province saw a slight correction this week (3.1-3.9), with an average market price of 16750 yuan/ton at the beginning of the week and 16650 yuan/ton at the end of the week, a decrease of 0.60%.
In early March, the overall trend showed a “stable to weak operation, slight fluctuations” pattern, with no significant fluctuations in prices. The price range was in line with the reasonable cost line of the industry.
| Gamma-PGA (gamma polyglutamic acid) |
supply side
As of early March, the domestic magnesium market has limited available spot goods, and some factories in the main production areas are still delivering pre year orders, resulting in insufficient supply of new spot goods. The pressure on factory inventory is relatively small, and the willingness to raise prices is clear. At the same time, the industry policy environment continues to optimize, and magnesium smelting has been removed from the “two highs” directory. Enterprises in the main production areas are gradually optimizing their production capacity structure, focusing on improving quality and efficiency. However, in the short term, the speed of capacity release has been slow, and there has not been a large amount of new capacity impacting the market, further consolidating the tight spot market situation. In addition, some high cost magnesium smelting enterprises in Shanxi, Shaanxi and other regions have gradually withdrawn from the market, and the overall smelting cost of the industry has increased, providing bottom support for magnesium ingot prices.
Demand side:
It presents the characteristic of “gradual recovery but insufficient strength”. Since March, downstream industries in China have gradually resumed work and production, with slow release of demand in areas such as new energy vehicles, aerospace, and consumer electronics. However, most downstream users and trading enterprises have sufficient stock before the year, and are still in the stage of inventory digestion in the short term. Purchasing is mainly for essential needs, and there is currently no large-scale replenishment demand, which has limited boosting effect on magnesium ingot prices. Among them, the new energy vehicle sector, as the core engine of magnesium demand growth, continues to increase the amount of magnesium used per vehicle, but the demand release pace is slow in the short term; Although emerging fields such as humanoid robots and commercial aerospace continue to expand their demand for magnesium alloys, they are still in the stage of small-scale application and have not yet formed large-scale demand support, making it difficult to drive a significant increase in magnesium ingot prices.
Cost side:
The cost side provides strong support for the price of magnesium ingots, and the industry’s cost bottom line is clear. Magnesium smelting mainly relies on coal as a reducing agent, and domestic coal prices remain stable with slight increases in some regions. Currently, magnesium ingot prices are above the cost line, and most enterprises have achieved small profits, further enhancing the factory’s ability to maintain high prices.
comprehensive analysis
Overall, there is a lack of core driving force for significant increases or decreases in magnesium ingot prices in the short term, and stable operation will be the main focus. Attention will be paid to the follow-up of downstream demand, the pace of capacity release in major production areas, and fluctuations in coal prices.
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