This week (5.22-5.25), the magnesium ingot market in Shaanxi region responded that the average market price was 16350 yuan/ton on May 22 and 16850 yuan/ton on May 25, with a daily increase of 3.06%.
| Gamma-PGA (gamma polyglutamic acid) |
Today, domestic magnesium prices rose across the board, with ex factory prices in the main production areas of Shaanxi and Shanxi generally increasing by 350-500 yuan/ton. Among them, the price of 99.9% magnesium ingots in Fugu, Shaanxi, jumped by 500 yuan/ton in a single day to 16800 yuan/ton, marking the largest daily increase in nearly a month.
Message surface
This morning, a safety production accident occurred in a large coal mine in Shanxi Province, and the news quickly spread in the market. Although the accident has not yet had a quantifiable impact on the actual supply of coal for magnesium smelting, the emotional level has been significantly amplified: according to statistics, as of today’s close, the quotation increase rate of magnesium plants in Shaanxi and Shanxi has reached 100%, and more than 60% of manufacturers have clearly stated that they will “suspend discounted sales”, and low-priced sources of goods have almost disappeared.
The following analysis is based on fundamentals:
The cost of raw materials continues to rise: Since mid May, the price of raw coal in Yulin, Shaanxi has risen by about 8%, and the production cost line of magnesium plants has risen to around 16400 yuan/ton. The transaction price of 16500-16600 yuan/ton in the early stage has approached the break even point, and the price space for manufacturers has returned to zero.
The magnesium aluminum ratio has reached an extremely low historical level: as of May 22, the magnesium aluminum ratio has dropped to 0.66, a decrease of 74% from the 2021 high point (2.58), far below the five-year average of 1.14. According to the average regression calculation of price comparison, the theoretical repair space for magnesium price exceeds 70%. This medium – to long-term signal has already attracted some funds to bargain hunting, and today’s emotional trigger has accelerated the formation.
Raw material side: Coal prices strengthen, supporting the bottom
The coal consumption for magnesium smelting accounts for more than 60% of the cost. Recently, the prices of thermal coal and ferrosilicon have been relatively strong, and the cost of magnesium per ton has increased by about 300-500 yuan, forcing enterprises to raise prices.
comprehensive forecast
The price increase this time is mainly driven by emotions, and the follow-up policies after the coal mine accident are the key variables. The predicted price range is 16500-17200 yuan/ton, and if there is no upgrade or shutdown, it will return to 16700 yuan.
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