According to the monitoring of the commodity market analysis system of SunSirs: the market of magnesium ingots in Shaanxi Province rose last week (5.5-5.9), with the average market price at the beginning of the week at 16,650 RMB/ton and the average market price at the weekend at 17,275 RMB/ton, an increase of 3.75%.

Last week, the magnesium market was turbulent due to the dynamics of the dolomite mine in Wutai County. Affected by the news of the mining area, downstream purchasing demand was significantly released, the purchasing volume increased sharply, and the factory inventory quickly tightened, and the magnesium price ushered in a rapid rise.

Supply and demand side

Some of the suspended factories that originally planned to gradually resume production after the holiday are currently taking a wait-and-see attitude due to changes in the supply of dolomite; while the inventory of enterprises that are still in production is generally at a low level. Considering that the cost of raw materials may rise further, these companies in production are not willing to ship goods, but are more inclined to maintain price stability, and their willingness to support prices has increased significantly. There is no obvious sign of recovery on the downstream demand side for the time being.

Raw materials

Recently, the market price of coal used to produce lignite has been falling, while the price of lignite itself has remained basically stable, and the price of ferrosilicon has also fallen slightly. However, due to the gap in dolomite supply, companies have to seek alternative sources from other regions. Affected by this, it is expected that the total cost of subsequent production will rise significantly.

Comprehensive analysis

Once the shutdown period is extended, the smelting efficiency of the main magnesium production areas will be significantly suppressed, and the raw material procurement cost will also rise significantly. In this case, there is a possibility that the magnesium price will rise further.

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