In 2011, it was the year when the global economy continued to recover from the bottom of the valley. Although various countries have different forecasts for economic growth, the economic recovery itself is already good news for the market. After experiencing a slow decline at the end of 2010, the price of magnesium has experienced a slight rebound in early 2011.
In domestic prices, the magnesium price was relatively stable in January. In early January, the price of magnesium rebounded from 16,800 yuan/t at the end of last year to 16,900 yuan/t, and stabilized at this price for the whole month. In February, after the Spring Festival, magnesium prices gradually climbed to 17,100 yuan/t, as market demand increased.
FOB Tianjin Port quoted, magnesium prices also from the end of last year's 2950 US dollars / t all the way up to the current 3020 US dollars / t.
In the US market from January to February, the overall price of magnesium in the US market was steadily rising.
According to the MW report, the import prices of US magnesium ingot traders rose slightly from 2.25 to 2.40 US dollars/lb to 2.35 to 2.45 US$/lb in January to February, and the US spot price for magnesium ingots rose from 2.35 to 2.50 US$/lb to 2.50 to 2.60. In US$/lb, U.S. die-cast alloy (trader) prices remain unchanged at 2.15 to 2.35 USD/lb.
In the European market, the quoted prices of relevant magnesium ingots in the European market during January and February this year were mixed.
The price of magnesium ingot disclosed by the British Metal Bulletin (MB) lags behind. From January to February, it fell from 3000 to 3250 USD/t to 2800 to 3,000 USD/t.
European strategic small metal Rotterdam warehouse prices rose from 3100 ~ 3250 US dollars / t to 3200 ~ 3350 US dollars / t.
The price of the European free market published in the US Metal Weekly (MW) rose from 2950 to 3,050 U.S. dollars/t to 3,100 to 3,200 U.S. dollars/t.
Market Analysis———The market is in a good position and the magnesium price rebounds. We believe that the rebound of the current magnesium price is mainly affected by the following factors:
1. Supply in some parts of the country has decreased Since the second half of last year, the Shaanxi region has further increased local coal mine management. In accordance with the provincial coal enterprise's target of controlling less than 120 enterprises, it is still necessary to increase the merger and reorganization of coal mining enterprises, the integration of coal mine resources, and the closure of coal mines. It is necessary to reduce the number of small coal mines by about 150 to change the current number of small coal mines is still high. And management of decentralized issues.
In view of this, since the end of last year, Shaanxi Shenmufugu and other regions have carried out a series of activities that severely cracked down on illegal coal production activities and established corresponding long-term effective mechanisms. The illegal uncovered coal mining dens and coal storage plants will be completely cleaned up, and the abandoned wellheads that have been declared to be closed and all mines will no longer be utilized and the illegal illegal wells that have been formed in the past will be blocked, destroyed, and buried. According to relevant reports, the local government's heavy punches and non-short-term actions will maintain long-term effectiveness in the local coal industry. The coal remediation measures in Shaanxi Province have caused local coal supply shortages to a certain extent, and have also affected the production of local magnesium plants. The local magnesium manufacturers have to reduce their production, which has led to a reduction in local magnesium production.
In addition to other regions outside Shaanxi, from the current understanding of the situation, the production is relatively stable, and it is expected that the output will not change much.
2. Effective increase in market demand (1) Domestic aspects In the first and second months of this year, especially after the Spring Festival, many manufacturers in the industry have indicated that they have increased their orders and orders, and the orders are better. From the analysis of the output growth of domestic downstream industries and the analysis of export data, we can see that the demand in the domestic and foreign markets has indeed increased.
On the steel side, the latest issue of the China Iron and Steel Association reported that the country’s crude steel production increased in the first half of February, and the national crude steel output in the first half of February reached 1.804 million tons, an increase of nearly 6% from the 1.73 million tons in January. It is close to the historical peak in late April last year. This, on the other hand, explains why the price of ferrosilicon has not come out of the industry's expected sharp drop in prices this year.
(2) Foreign sources According to statistics from the General Administration of Customs, in January 2011, China exported a total of 35,000 tons of various types of magnesium products, an increase of 18.01% over the same period of last year, with a cumulative amount of US$104 million, a year-on-year increase of 30.92%. Including magnesium ingots, magnesium alloys, and ** respectively accumulated exports of 17,000 tons, 0.94 million tons, 0.73 million tons, an increase of 38.04%, 14.75%, -8.04%.
From the perspective of exports, in January of this year, China's exports of various magnesium products increased by 18% over the same period of last year. In January last year, the growth rate was nearly 102% compared to January 2009, the period of global economic downturn. It recovered to the level of exports in 2007, while the volume of 35037t exported in January this year was comparable to the peak value of 35094t in January 2008. The growth in foreign demand is very obvious. The foreign market is gradually warming up and showing an active trend.
According to the IMF's forecast, the GDP growth rate of developed economies in 2011 was 2.2%, of which the US economy was expected to grow by 2.3%, the euro zone by 1.7%, and Japan by 1.5%. Countries adopt different degrees of loose monetary policies to stimulate domestic economic growth. The strength of US economic data and other factors will all contribute to global economic growth and create a favorable external environment.
3. The price of raw material products Supporting the successive full-scale production of ferrosilicon manufacturers started in December last year did not result in a sharp drop in ferrosilicon prices as expected in the industry. On the contrary, the price of ferrosilicon in January was very stable. At one time, the supply shortage caused by the increase in downstream purchases has played a major role in supporting the stabilization of magnesium prices.
As of the end of February, ferrosilicon prices fell by around RMB 200/t from the end of last year.
4. The soaring price of basic metals The soaring price of basic metals has become an external driving force for the rise of magnesium prices.
Thanks to the favorable international economic situation, basic metals such as copper and aluminum rose from January to February. Although prices fell at different rates in the later period, the overall prices were higher, and the prices of copper and tin in the LME market hit record highs.
In the case of metallic copper, it rose sharply at the end of January this year, breaking the record high of $10,000/t, setting a record high. The March closing price of LME copper rose by 2.33% at the end of February compared to the end of last year, and the price of copper at Shanghai Futures Exchange also rose by about 3.44%. .
In March, the market will gradually enter the supply and demand boom as usual, in March the magnesium market will gradually enter the supply and demand boom season.
On the supply side, the increase in market demand for magnesium in January and February not only pushed up the price of magnesium but also stimulated the enthusiasm of the companies in the industry to increase production. The industry is generally optimistic about this year's magnesium market. Currently, some manufacturers have said that they will restart some stagnant production capacity this year. At the same time, news of new magnesium plants will continue. In 2011, the continued growth of magnesium ingot production is a foregone conclusion. However, in view of the lags in the restart and new production capacity, the increase in production is expected to remain limited in March. With the temperature rising, it is expected that the relevant coal demand will be reduced, while the supply of magnesium enterprises increased coal, Shaanxi Province, magnesium production cuts will be eased, and production will increase.
In terms of demand, after the beginning of spring, various industries have gradually ushered in the season of production and sales. If there is no emergency, domestic demand will continue to grow steadily. Foreign demand will continue to grow under the influence of the gradual recovery of the global economy.
In terms of ferrosilicon, ferrosilicon enterprises in January and February have started construction and production, and ferrosilicon production is expected to increase steadily in March. Although the current price of ferrosilicon is not much, the market's weaker features are more obvious. The increase in market supply in March will further promote the lower price of ferrosilicon. At the same time, the sharp increase in the output of the steel industry has also led to a sharp increase in the internal inventory of steel companies, indicating that the steel market is still in a weak position. Although some people think that investment in infrastructure investment, water conservancy construction, and railway construction in China will remain high in 2011, high-yield production and inventory will exert pressure on the steel market in the short term, and the steel market will become weaker and stronger. day.
To sum up, we believe that magnesium prices are mainly stable in March, and the fluctuation range is between 16700 and 17500 yuan/t.
