According to the monitoring of the commodity market analysis system of Shengyi Society, the magnesium ingot market in Shaanxi Province rose this week (3.23-3.27), with an average market price of 16950 yuan/ton at the beginning of the week and 17050 yuan/ton at the end of the week, an increase of 0.59%.
The domestic magnesium ingot market has emerged from a volatile upward trend and stabilized at a high level, with an overall strong market trend and a steady upward shift in price focus, without a significant correction. The main reasons for the fluctuation of magnesium prices in this round are the rise in raw material costs, supply side control of quantity and price, and the result of multi-party games to maintain demand stability.
supply side
This week, the domestic magnesium ingot supply side performed steadily, and the operating rate in the main production areas remained stable, without large-scale resumption or reduction of production. In terms of inventory, it is at a historical low during the same period, with both internal and external inventory being relatively low, and there is a scarcity of available spot goods. Affected by cost pressure, manufacturers have a strong mentality of holding back prices and being reluctant to sell. Top companies have clearly refused to sell at low prices and prioritized the execution of long-term orders in the early stage. The spot market has limited investment, and low-priced sources continue to dry up. The tightening of the supply side has provided strong support for prices.
Demand side:
This week, the demand for magnesium ingots has shown moderate performance, with the overall focus on rigid procurement. There has been no large-scale replenishment or centralized procurement, which is also the main reason for the slowdown in the rise of magnesium prices and the high-level stalemate. The export orders for magnesium ingots have remained stable with no significant increase, and the demand from overseas markets has limited impact on the domestic market. Overall, the demand side is not lagging behind but has not shown any outstanding performance, and the forces of supply and demand are tending towards balance, forming a high-level stalemate pattern.
Cost side:
Ferrosilicon, as the core reducing agent in magnesium smelting, accounts for over 30% of the production cost. This week, the price of 72 # ferrosilicon is running strong. The current price increase of ferrosilicon is mainly affected by disturbances in overseas mineral supply. The Australian typhoon caused the suspension of manganese ore shipments, driving the overall strength of the ferroalloy sector. In addition, the low operating rate of domestic ferrosilicon manufacturers and tight spot supply provide strong cost support for magnesium prices. The prices of blue charcoal and coal have risen simultaneously, further pushing up the cost of smelting. Affected by the geopolitical situation in the Middle East and the rise in international oil prices, the demand for coal substitution has increased, and domestic prices of blue charcoal and thermal coal have remained stable and strengthened.
comprehensive analysis
Based on the two core factors of comprehensive cost and supply and demand, it is difficult for domestic magnesium prices to experience significant fluctuations in the short term, and it is highly likely to maintain a high volatility trend We need to pay close attention to the price trends of raw materials such as ferrosilicon and coal in the future. If the raw materials continue to strengthen, magnesium prices are expected to break through the current range.
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