SunSirs: Chinese Magnesium Price Basically Bottomed after Endless Decline

List of magnesium market trends

On May 29, 2020, the price of ex-factory cash inclusive of magnesium ingots (99.9%, no pickling, simple packaging) in all major production areas in China was basically stable. The current mainstream quotation range is 13,100-13,400 yuan / ton, and the actual single order is mainly negotiated.

According to SunSirs follow-up information, the ex-factory tax-included cash in Fugu area is 13,100-13,300 yuan / ton; the Taiyuan area is 13,150-13,300 yuan / ton; the Wenxi area is 13,300-13,400 yuan / ton; the Ningxia area is 13,150-13,250 yuan / ton.

According to SunSirs data, the average domestic market price on the 29th was 13,250 yuan / ton, compared with the average market price of 14,166.67 yuan / ton in early May, a decrease of 6.47%.

The overall market of magnesium ingot market is weak in 2020. Affected by the COVID19 since the quotation was resumed in mid-February, the price of magnesium ingot was limited due to transportation, and the market was once priceless and the market was flat. Subsequently, the transaction gradually recovered, and the price of magnesium ingots fell all the way.

Pre-holiday period

January-Mid-February: As the Spring Festival approaches, market trading is weakening and market conditions are stable. The early stage of the downstream is fully stocked, the festive atmosphere is getting better, and the downstream operating rate is down. Before the holiday, the price of magnesium ingots ran smoothly, with a price range of 14,000-14,200 yuan / ton.

The price jumped at the beginning of the holiday

In mid-February, affected by COVID19, mainstream magnesium plants are still fully resuming work, and sales are mainly based on home office. The actual trading is affected by transportation factors and weaker demand for downstream work that has not been resumed. Mainstream manufacturers raised external quotations and asked for directions.

Endless decline period

From mid-February to mid-April, the price of magnesium ingots has moved down. In the early stage, it was subject to traffic control, and inventory shipments were not smooth. Later, due to the downstream production and resumption of production, it was not as expected.

In the early stage, as the real trading gradually started, the prices of magnesium ingots gradually restored to the market after two-way selection. Later, it is reported that on the one hand, based on the short-term imbalance of supply and demand, some magnesium companies in the main production areas have stronger willingness to ship and higher demand for payment large, sometimes low-cost shipments; on the other hand, the recent general commodity decline, downstream willingness to receive goods declined, traders willingness to hoard goods to freezing point, procurement is mainly based on rigid demand, small batches, such as The city is more cautious. The overall purchase volume in the market is not large, and trading is relatively light.

Bottoming shock

From mid-April to May, the price of magnesium fell to its lowest level in 3 years, and the purchase in the market gradually picked up. Manufacturers were affected by cost factors and their willingness to increase prices rose. The willingness of some manufacturers to stop production and maintenance has risen, the long and short games have intensified, and the market has been operating steadily.

Market outlook

Downstream demand is weak, the price of magnesium ingots is currently low, and the weather is gradually turning hot. It is expected that some factories will be shut down for maintenance in June. The supply side will have a certain positive effect on magnesium prices. In the later period, we pay attention to the changes in the purchasing rhythm of the downstream market.

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