27Feb
2020

Current situation analysis of magnesium industry

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Current situation analysis of magnesium industry

 

I. overview of market operation

       Affected by the outbreak of COVID-19 and subsequent poor sales during the Spring Festival, A small part of the magnesium enterprises have emptied inventory before the coming of Chinese new year and their plants have been closed, and the rest operating enterprises have also cut their capacity and sales volume because of raw materials supply problems. On the current magnesium enterprises are introubles, Fugu Tianlong magnesium industry Manager Chen totally attributed to three reasons, the first: raw material problems. Raw coal cannot supply in time, surrounding coal mines have been discontinued and fuel supply is insufficient; Second: logistics problems, transport checkpoints have been closed, and now are unable to ship; Third, labor problems. During the Spring Festival, workers had asked for leave. Affected by the epidemic, they could not return to work on schedule after the Spring Festival, resulting in a serious decline in output. Chen said that the surrounding magnesium enterprises are in production, there is the same problem, the original coal problem is the most important.

Ii. Magnesium ingot price

Region

Price

Ups and Dowms

Fugu

14900-15000

↑100

Ningxia

14900-15000

↑100

Taiyuan

15100-15200

↑100

Wenxi

15200-15400

↑100

Yesterday, we learned that 99.9% magnesium ingots of Fugu district factory reported the main ex-factory cash price including tax 15,000 yuan/ton, the main transaction price of 14900-15000 yuan/ton, there are also factories do not quote. However, in the decisive period of the outbreak prevention and control battle, vehicle supervision is still very strict and the transportation process is still not smooth.

Iii. Operations of the enterprises

     In order to stop the spread of the epidemic and win the battle for the prevention and control of the epidemic, measures were taken in the Shaanxi Province, the Shanxi Province, the Henan Province, The Zhejiang Province and Inner Mongolia to extend holidays and delay the return to work of enterprises no earlier than 24:00 on February 9), which greatly affected the production and operation of enterprises. According to our understanding, the former magnesium enterprises in the Shaanxi Province mainly reduce production, and the current raw material inventory can only maintain the production for 1-2 weeks. The production of raw magnesium in the Shanxi Province is basically stable. In terms of alloy production, some enterprises keep stable, and some enterprises reduce production by about 30% due to transportation problems. The production of raw magnesium in the Xinjiang Province remains stable. Affected by local policies and logistics, magnesium powder enterprises in the Henan Province (mainly in Hebi) have basically stopped production, and the resumption time is uncertain.

Iiii. afternoon trend

       In the short term, transportation and labor shortage will be an important factor restricting current enterprise production. Of course, it is the most important factor for the country to guide all industries to resume normal production according to the development of the epidemic. Therefore, the market supply will maintain the existing pattern, wait-and-see will be the main tone of the market, prices are also in the current price range of narrow range.

We believe that under the strong leadership of the CPC central committee, we will certainly overcome the outbreak of the new coronavirus, and the temporary difficulties of the magnesium industry will also collapse, and enter a benign upward path, so that we can meet the "magnesium" good tomorrow together.