Market analysis

Magnesium prices are steadily rising. At the beginning of the week, the magnesium market maintained a high level of consolidation. Although the supply and demand were slightly stalemate, the magnesium plants intend to firm up and keep their prices stable. On Friday, the average ex-factory price of domestic magnesium ingots including tax was 38,000 yuan/ton.

As of December 3, the specific price ranges in each region are as follows: Fugu area ex-factory tax-included cash exchange 37900-38,000 yuan/ton; Ningxia area ex-factory tax-included cash exchange 37900-38,000 yuan/ton; Taiyuan area ex-factory tax-included cash exchange 38,000-38,100 yuan /Ton; Wenxi area ex-factory tax-included cash RMB 38100-38200/ton.

Cost side impact

Thermal coal: Some areas in Shaanxi were affected by snowfall, and the overall price was weak and stable. According to the data of the business agency, the average price of thermal coal was 1085 yuan/ton. The supply of production areas increased and the production capacity was released, but the overall market was in a stalemate.

In terms of ferrosilicon: the mainstream price of 75 ferrosilicon in the main producing areas of Ningxia is around 8400-8600 yuan/ton, the price of blue charcoal is adjusted to 1730 yuan/ton, and the price of blue charcoal medium and small materials is adjusted to 1700 yuan/ton. The Zhongwei City Bureau of Industry and Information Technology and the Ecological Environment Bureau issued a notice on the implementation of staggered production in some industrial sectors in the winter and spring of 2021-2022, involving 14 ferroalloy companies. However, based on the current market feedback, the dual control policy for Zhongwei is slightly obvious numbness.

Environmental protection inspector news impact

Recently, the Central Ecological and Environmental Protection Inspection Team carried out inspection work in Shaanxi in December. The start of the magnesium plant was affected by this news, which caused the magnesium price to rise rapidly. However, according to the sales staff of the magnesium plant, whether the subsequent production of the environmental protection inspection team A production reduction plan is not yet clear.

The impact of market supply shortage

The overall inventory of the magnesium plant itself is not large, and orders are basically placed, and some orders have been scheduled to next month. Zhouwei Magnesium Factory’s joint quotation has driven the market, making it even more difficult to find low-priced sources in the market. The rise in prices has also made downstream customers affected by the mentality of "buying up, not buying down", speeding up the pace of transactions. The willingness is not high, keep purchasing cautiously.

Outlook forecast

On the whole, given that the current factory generally does not have much spot inventories, magnesium manufacturers have a strong sentiment for prices, which makes it difficult to find low-priced spot in the market. Overlapping information from environmental protection inspections in Shaanxi, magnesium factories have good expectations for the market outlook. Magnesium ingots are expected to be in the short term. The steady rise continues, but the downstream is not active in purchasing high prices, and there is limited room for substantial fluctuations.

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