Trend of metallic magnesium (9.1-9.30, the same below)

In September, the price of magnesium rose to 70000 +. According to the price data of business agency, as of September 30, the market tax included spot exchange was 51666.67 yuan / ton, an increase of 171.93% over the beginning of the week.

At the beginning of the month, the market was relatively calm, with frequent policy news on production restriction and reduction, and merchants in the magnesium industry chain operated cautiously; In the middle of the month, as soon as the “double control” document was issued in Yulin, there was an uproar in the magnesium market, and the price of magnesium also rose to 40 million yuan; Then, during the Mid Autumn Festival, the documents were landed and the policies were overweight. The price of magnesium rose by 10000 yuan every day, and the enterprises involved were shut down successively. After experiencing the soaring market, the magnesium price also showed a downward trend. One week at the end of the month, the magnesium price stopped rising and fell back, returned to the rational channel, and sought the market balance point. The rise of magnesium price is jointly affected by many factors: energy consumption “double control” policy, environmental protection transformation, power restriction and so on.

On September 29, the magnesium commodity index was 315.04, up 7.72 points from yesterday, down 3.12% from the highest point of 325.20 points in the cycle (2021-09-27), and up 333.46% from the lowest point of 72.68 points on January 10, 2016. (Note: the period refers to the period from March 1, 2012 to now)

The pressure of environmental protection affects the decline of magnesium production capacity

Since August, Shaanxi Province has put forward new environmental protection requirements. As a high energy consuming industry, the task of upgrading and transformation is particularly severe. Meanwhile, the blue carbon industry is also stepping up its optimization. According to the requirements of the Industrial Guidance Catalogue of the national development and Reform Commission, the blue carbon production plant with a single furnace capacity of less than 75000 tons is upgraded. While the magnesium plant pays a lot of environmental protection upgrading and transformation costs, the production cost also increases, which is also the reason for the rise of magnesium price.

Limited production and electricity under the dual control of magnesium City

On September 13, Yulin development and Reform Commission issued a notice to ensure the completion of the dual control target task of energy consumption in 2021. Most magnesium enterprises in the main production area have 50% limited output, involving more than 40 magnesium plants. On September 20, the first batch of energy consumption double control key regulation enterprises in Fugu County stopped production and power supply measures, including blue carbon and magnesium ingot enterprises. In the face of sudden changes in the market, most magnesium plants shut down on a large scale, the time of resumption of production is not clear, and most magnesium enterprises do not report the closure.

At present, the spot supply of magnesium ingots in the market has been sharply compressed, and the reluctance of magnesium factories to sell is obvious. On the demand side, downstream customers do not accept high priced magnesium, are cautious in placing orders, and procurement is generally delayed. It is understood that many magnesium plants and downstream businesses are deeply worried about this. With the rise of prices, the increase of raw material costs leads to a loss. Plus the weakness of both supply and demand, the high level of magnesium price callback in the last few days of the month.

High costs push up magnesium prices

According to the price monitoring of the business community, the coal price continued to rise. As of September 26, the monthly increase of power coal, coking coal and coke reached 37.05%, 31.70% and 21.70% respectively. The port inventory remains low, adding that most domestic coal mines are in the shutdown stage, and there is little coal in the market as a whole. Magnesium plants have difficulty in purchasing coal, and there is no market for price, resulting in rising costs. The price rise of ferrosilicon steel is finalized, indicating that the future price will still be high.

Future forecast

After the specific production and power restriction documents came out, the magnesium plant had an obvious mentality of reluctant to sell, and the merchants had a strong willingness to support the price. In addition, the magnesium plant was also faced with dual cost pressure. On the one hand, the soaring of raw materials such as coal and ferrosilicon, on the other hand, it was faced with environmental pressure, resulting in the high price of magnesium. However, considering the high price of magnesium ingots, in addition to individual rigid needs, some purchasing end users chose to delist and wait and see the market, and the market transaction slowed down. Generally speaking, the current magnesium price has a high downward trend. Business analysts believe that the magnesium price is in a high shock callback state in the short term, and more attention is paid to the market transaction and policy news in the future.