As the price of magnesium ingot was rapidly raised at the end of February, with the rise of magnesium price, the acceptance capacity of downstream users is obviously small, which is bound to affect the downstream demand, and the social inventory is relatively sufficient, resulting in a sharp drop in magnesium price of nearly 3000 RMB/ton in early March; Subsequently, the price of magnesium ingots was uneasy all the way, falling and rising every week. It fell below the 40000 yuan mark in mid March, but stopped falling and stabilized after a short decline; In the fourth week of March, the magnesium market operated around the node of 40000 yuan. Because the third ecological and environmental protection supervision group of the central government wanted to feed back the supervision situation of Shaanxi Province, it slightly drove the market activity. The magnesium plant increased the market exploration slightly, but it was affected by the downstream demand, and the quotation showed a downward trend after the increase.
As of March 31, the market tax included spot exchange was 40666.67 RMB/ton, down about 4500 RMB/ton or 9.96% from the beginning of the month.
Market analysis
The export volume is less than expected
According to customs statistics, the export volume of China's magnesium ingots from January to February was about 41633.2 tons, an increase of 14.8% over the same period. Overseas traders learned that overseas demand in March was lower than expected. This is mainly due to the uncertain impact of the early winter Olympic and Paralympic Games and environmental protection policies on the production of magnesium ingots in the main production areas, resulting in a significant increase in the export volume of magnesium ingots at the end of 2021. At present, the overseas downstream is still dominated by digesting the early inventory.
In addition, the domestic epidemic made a comeback in March, which had a great impact on the production, processing and transportation of domestic magnesium plants. Another important reason is that most downstream customers hold the psychology of "buying up but not buying down". In March, the price of magnesium continued to fall. Most customers inside and outside Shanghai were on the sidelines, and the replenishment operation was cautious.
Stable start-up of magnesium plant
The overall production situation of the supply side is relatively stable, and there are still slight signs of inventory accumulation in the factory. According to the business society, the output of magnesium ingots in China in February 2022 and February 2022 was 83211 tons, an increase of 0.99% month on month and 25.73% year-on-year. The pattern of oversupply is prominent. Even if the magnesium plant is willing to stabilize the price, the transaction atmosphere is light.
Rising raw material costs
In March, the coke market rose for three rounds, with a total increase of 600 RMB/ton. Coking enterprises also showed limited production due to the increase of inventory. Transportation problems made it more difficult for magnesium plants to purchase coke, which indirectly raised the medium and long-term production cost of magnesium ingots. The raw material ferrosilicon has a bullish trend. On the 28th, the quotation of ferrosilicon in the main production area of Ningxia was 9400-9600 RMB/ton. The blue carbon market was strong, and some enterprises raised the ex factory price of blue carbon by 50-100 RMB/ton
Future forecast
At present, the market price is in a dilemma, and the buyer and the seller are in a seesaw situation. Although the capital pressure of the factory is small and the price protection intention is obvious, under the influence of the rapid decline of magnesium price, downstream customers do not consider entering the market temporarily. Only some low-cost resources are traded in the market, the market transaction is relatively tired, and the upward trend of magnesium price lacks power support. Business analysts believe that in the short term, the price of magnesium ingots will continue to stabilize the market, and the overall price will still be around 40000 yuan in April.
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