Downstream purchases increase, magnesium prices rise steadily

Author: Luo Shejuan
In the last week of July, mainly driven by the increase in export purchases, coupled with the on-demand purchases by domestic users, magnesium prices went out of a steadily rising trend in the face of the shortage of factory stocks. As of July 30, the 99.9% magnesium ingot Fugu area factory reported the mainstream ex-factory tax-included cash price of 21,000 yuan/ton. It is understood that the mainstream transaction price is 20,800 to 20,900 yuan/ton, which is the lowest of 20,000 yuan/ton from last week. The transaction price of ton went up by 800 yuan to 900 yuan/ton, and that in Wenxi area was 21,000 to 21,100 yuan/ton. In July, the overall average price of magnesium was higher than that in June by more than RMB 800/ton. Regarding the trend of the magnesium market this week, the current market is mostly stable, and some market participants said that it is difficult to say for the time being.
On June 30, the author learned from a manager of a trading company that this week, some early export orders were re-ordered for purchase, and some new long-term export orders were added, export purchases increased, and export inquiries were also more active.
The author learned from the general manager of another trading company that on June 29, the ex-factory tax-included cash price of 20,800 yuan per ton of general magnesium in Fugu was transacted. On June 30, the factory quotation was generally 21,000 yuan per ton. Tons, factories are generally short of stocks, and several of them are out of stock. Taking into account that the current magnesium price has risen to a high point, this person believes that after this wave of purchases, it is difficult for the magnesium price to continue to rise, and it is expected to stabilize operation, and it is unlikely to fall back supported by rising costs.
The analysis believes that from the perspective of supply and demand, given that the current factory spot is generally tight, the prices of coal and ferrosilicon are steadily rising, and the demand and cost sides are supported together, it is expected that magnesium prices will show a high and strong operation this week, easy to rise and difficult to fall. situation. This is the main reason that magnesium prices are likely to rise but not fall this year. Market participants generally believe that the operating rate of factories is generally not high, inventory pressure is always low, and the cost of raw materials remains high.

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