According to the monitoring of the commodity market analysis system of Shengyi Society, the magnesium ingot market in Shaanxi Province fell this week (12.1-12.6), with an average market price of 16466 yuan/ton at the beginning of the week and 16366 yuan/ton at the end of the week, a decrease of 0.61%.

This week’s market analysis

Since early December, the magnesium ingot market has continued to consolidate weakly and remain cautious. The market is influenced by the mentality of “buying up, not buying down”, and downstream buyers are more cautious. Starting this week, magnesium prices have continued their downward trend from last month, and as of the end of this week, prices have shown a stable trend.

Production end

The further decline in magnesium prices has made production and operation more difficult for factories. Most factories are unwilling to make losses in transactions, and the situation of production stoppage and reduction has intensified. Market transactions have further shrunk, and some manufacturers with high financial pressure have shipped in small quantities. Some factories have stopped production on the news side.

Supply and demand side

At present, it has become the norm for supply to exceed demand, and it is difficult to reverse in the short term. Due to the fact that production costs are inverted, some factories have stopped production and reduced output. In addition, there were rumors of a “reserve purchase” over the weekend, which had a slight impact on stopping the decline of magnesium prices.

comprehensive analysis

The sustained decline in magnesium prices in the short term has had an impact on confidence within the magnesium metal industry. In the short term, the supply and demand sides may be in a stalemate game, and the industry sentiment is mainly cautious and wait-and-see. The expected trend next week is mainly consolidation. More attention should be paid to the situation of factory shutdown.

According to the commodity analysis system of Shengyi Society, the market for locally refined petroleum coke continued to rise in November. The mainstream average price of petroleum coke products from major domestic refineries was 1583.25 yuan/ton on December 5th and 1478.50 yuan/ton on November 1st, with a monthly increase of 7.08%.

Cost aspect: The international oil price market in November was mainly volatile, with a significant increase in crude oil market prices at the beginning of the month, and a gradual decline in crude oil prices in the later period. Overall, the crude oil market situation did not change much. On the one hand, the unstable geopolitical situation in the Middle East remains one of the important factors affecting the crude oil market. On the other hand, crude oil supply remains tight, and OPEC’s production reduction plan of 2.2 million barrels per day has been extended until the end of December, indicating continued supply constraints. However, the outlook for crude oil demand is not optimistic, which is suppressing the crude oil market price. Overall, the crude oil market price is mainly fluctuating widely.

Supply side: The price of locally refined petroleum coke continued to rise in November, with good transactions; The supply of low sulfur coke is tight, the inventory of medium and high sulfur coke is low, and the shipment is good. The downstream negative electrode material and aluminum carbon market are actively receiving goods. In addition, the low sulfur sponge coke market resources at the port are tight in November, and the market shipment is not under pressure.

On the demand side: Currently, the overall trading atmosphere in the domestic silicon metal market is relatively quiet. As the overall operating expectations continue to decline, the pressure on the silicon metal supply side is controllable. Although the transmission performance between supply and demand is still average, it will be able to maintain weak stability. Currently, the main refineries have stopped supplying petroleum coke to the fuel and silicon industries, pushing up the price of imported low sulfur petroleum coke.

The market for medium sulfur calcined coke rose in November, with the price of petroleum coke, a raw material for medium high sulfur calcined coke, continuing to rise. Downstream negative electrode enterprises still have decent demand, supporting the calcined coke market.

Due to the implementation of the aluminum export tax rebate policy on December 1st, the frequency of overseas buyers’ inquiries and the pace of rushing for exports have continued to accelerate recently. In late November, the downstream demand for aluminum ingots was still strong, and the off-season was not weak. In December, with the slowdown of downstream export pace, there may be negative feedback on the aluminum ingot market, and the expectation of a off-season may come. Aluminum carbon enterprises mainly purchase petroleum coke for essential needs.

Future forecast: Currently, the downstream negative electrode materials and aluminum carbon markets in the petroleum coke market are actively receiving orders; The main refinery has stopped supplying fuel and silicon industries; The supply of imported low sulfur sponge coke is tight, and refineries continue to raise the price of petroleum coke. It is expected that the price of petroleum coke will continue to rise slightly in the near future.

1、 Price trend

Recently, the melamine market has been under pressure, with prices continuing to decline. On December 4th, the benchmark price of melamine in Shengyi Society was 6417.50 yuan/ton, a decrease of -0.04% compared to the beginning of this month (6420.00 yuan/ton).

2、 Upstream raw material prices

As one of the main raw materials for melamine, the price fluctuation of urea directly affects the production cost and market price of melamine. Recently, the domestic urea market has continued to operate in a stable to weak trend, with some manufacturers experiencing a slight decrease in quotes and the overall market transaction center shifting downwards. This has led to a decrease in the production cost of melamine, but has not effectively boosted market demand. Instead, it has exacerbated the weak operating situation of the market due to oversupply. On December 4th, the benchmark price of urea in Shengyi Society was 1981.25 yuan/ton, unchanged from the beginning of this month.

3、 Market Atmosphere and Future Prospects

1. Overcapacity: The rapid growth of melamine production capacity in China has led to oversupply in the market. In the future, with the deployment of more new production capacity, the problem of overcapacity will further intensify, which will limit the long-term development of the melamine market.

2. Weak downstream demand: The main application areas of melamine include board, impregnated paper, adhesives, coatings, etc. However, the market demand in these fields has grown slowly, and even experienced a decline during certain periods. For example, the regulatory policies in the real estate market have led to a decrease in demand for building templates, which in turn affects the market demand for melamine.

3. The export situation is severe: the export market for melamine is also facing severe challenges. On the one hand, the international market competition is fierce, and Chinese products need to face competition from other countries and regions; On the other hand, the international trade environment is complex and ever-changing, and uncertain factors such as trade barriers and technical barriers may affect the export of melamine.

4. Increased environmental pressure: With the continuous strengthening of environmental policies, melamine production enterprises need to increase environmental investment, improve production processes, and reduce pollution emissions. This will increase the production costs of the enterprise, reduce profit margins, and thus affect the production enthusiasm and market competitiveness of the enterprise.

At present, the market atmosphere for melamine is average, and the market is operating weakly and steadily. Affected by the increase in supply and weak demand, the market price of melamine is expected to continue to operate at a low level. In the foreseeable future, with the gradual release of new production capacity and the gradual recovery of downstream demand, the supply and demand relationship in the melamine market is expected to be adjusted. However, in the short term, the market may still face pressure from oversupply, and the trend of low prices is difficult to change.

In summary, although the melamine market may remain stable in the short term, it still faces many challenges in the long run. Enterprises need to actively respond to the challenges brought by market changes and policy adjustments, and seek new development opportunities and growth points.

According to the analysis of the Business Society’s market monitoring system, on December 3rd, the reference price for the domestic silicon metal # 441 market was 12070 yuan/ton. Compared with November 23rd (the market price for silicon metal # 441 was 12120 yuan/ton), the price decreased by 50 yuan/ton, a decrease of 0.41%; Compared to November 1st, it is basically unchanged. Compared with October 1st (market price of 11960 yuan/ton for silicon metal # 441), the price has increased by 110 yuan/ton, a rise of 0.92%.

From the market monitoring system of Shengyi Society, it can be seen that at the end of November, the domestic spot market for silicon metal 441 # was slightly weak and declining. At the beginning of November, the spot market for silicon metal experienced a slight upward trend, with overall production declining to support a slight increase in the spot market. However, the downstream demand side showed caution, and the transmission between supply and demand was average. The market lacked sustained upward momentum, and subsequently the silicon metal market remained stable and stable. As the end of the month approached, the spot market for silicon metal # 441 experienced a slight decline due to the cold weather, and the overall market situation returned to the level at the beginning of the month. Among them, the market price of silicon metal # 441 in Sichuan region decreased by 50 yuan/ton, with a reference price of 11500~11600 yuan/ton. The market price of metal silicon 441 # in Huangpu Port area has been lowered by 50 yuan/ton, with a reference price of 12000-12100 yuan/ton. Subsequently, the overall spot market remained stable and entered December.

Market analysis in the future

At present, the overall trading atmosphere in the domestic silicon metal market is relatively quiet. With the overall expectation of on-site construction continuing to decline, the pressure on the silicon metal supply side is controllable. Although the transmission performance between supply and demand is still average, it will be able to maintain weak stability. The silicon metal data analyst from Business Society believes that in the short term, the domestic silicon metal market will mainly operate with large stability and small movements, and specific changes in supply and demand news need to be monitored.

Zinc price in November

According to the Commodity Market Analysis System of Shengyi Society, as of November 30th, the zinc price was 25720 yuan/ton, a significant increase of 2.24% compared to the zinc price of 25156 yuan/ton on November 1st. The zinc price gradually rose in November amidst fluctuations.

Zinc prices rose slightly in November, and continued to rise in October. The overall center of gravity of zinc prices has shifted upward.

According to the Commodity Market Analysis System of Shengyi Society, zinc prices will experience a pullback in June and July 2024, followed by a rise in August and a slight increase in September, October, and November. The average zinc price in November is at a high level for the year.

Supply and demand side

This month, the tight supply situation of zinc ore is still difficult to ease. According to market monitoring, the tight supply of raw materials has led to an increase in costs for smelters, and some smelters such as Chihong, Shengtun, and Baiyin are expected to reduce their production. Smelting output is expected to remain low. At the same time, the seasonal reduction in production in northern mines has further exacerbated the tight supply situation. Although there are reports that mining supply will increase after the first quarter of 2025, the tight supply situation will continue in the short term.

On the demand side, the zinc market demand this month has shown a low season characteristic. As the end of the year approaches, the traditional peak consumption season is gradually coming to an end, and downstream demand has weakened. Especially in the northern region, due to the impact of the heating season, downstream enterprises have experienced phased production cuts and shutdowns, leading to further decline in demand. The operating rates of industries such as galvanizing and die-casting zinc alloys have not been able to maintain high levels, and the overall demand performance has fallen short of expectations.

The price of zinc is showing a fluctuating trend under the dual pressure of tight supply and low demand season. Under the influence of the continuous decline in zinc warehouse receipts in Shanghai and the high position of recent month contracts, the bullish sentiment of funds has been strong, and zinc prices have risen at one point. At the end of the month, due to the uncertainty of macro sentiment, zinc prices fluctuated weakly. Overall, the fluctuation range of zinc prices this month is relatively broad, but the overall increase is limited.

Future forecast

It is expected that zinc prices will continue to be affected by the dual effects of tight supply and low demand season. In the short term, the shortage of raw materials on the supply side is difficult to alleviate, but the increase in production and import volume of smelters will gradually ease the supply pressure. On the demand side, with the end of the heating season and downstream enterprises resuming work, demand is expected to gradually rebound. Expected to fluctuate in the short term.

According to the monitoring of the commodity market analysis system of Shengyi Society, the magnesium ingot market in Shaanxi Province has slightly declined, with an average market price of 16466 yuan/ton at the end of the month and 17633 yuan/ton at the beginning of the month, a decrease of 6.62%.

This month’s market analysis

Entering November 2024, the magnesium price market continues to decline amidst fluctuations. Although the production side intends to raise prices to maintain stability, limited demand has led to a continuous decline in magnesium prices. This month, influenced by multiple factors such as domestic and international economic situation, supply and demand relationship, and cost, magnesium prices are seeking a new equilibrium point amidst fluctuations.

Supply and demand side

Overall, the current situation of oversupply has not eased. Although the factory has the willingness to raise prices, due to the overall high inventory in the current supply side market, there is significant pressure on the factory to release inventory, resulting in some factories experiencing production losses. Market confidence is slightly negative, and magnesium ingot prices are under pressure to decline.

In terms of raw materials

Raw material ferrosilicon, in November, is in the traditional off-season of industry demand. Currently, most buyers have low purchasing enthusiasm and a certain degree of price pressure sentiment, and the domestic ferrosilicon spot market is mainly running weakly. According to the Commodity Market Analysis System of Shengyi Society, the market price of ferrosilicon (grade: FeSi75-B; particle size grade/mm: natural block) in Ningxia is between 6000-6200 yuan/ton, with an average market price of 6121 yuan/ton, a decrease of 0.83% from the beginning of the month.

The domestic price of raw material orchid charcoal did not fluctuate significantly in November. The bidding price of Shaanxi Coal Mine has slightly fallen by 12.8 yuan/ton, and against the backdrop of limited cost fluctuations, the blue charcoal market is currently operating steadily. At present, the main focus at the pithead is on destocking. Under the sluggish market demand, there has been no significant improvement in transportation in mining areas. Currently, a nationwide cold wave is approaching, but overall downstream inventory is still at a high level. Multiple parties are holding onto essential procurement, and terminal demand still needs to be further released. As of the 28th, the current price of Shenmu’s intermediate materials is 950-1020 yuan/ton, the price of small materials is 890-980 yuan/ton, and the mainstream price of coke surface is 630-650 yuan/ton, all of which are ex factory cash prices including tax.

Future forecast

The magnesium ingot market initially remained weak and stable before fluctuating, with prices showing a gradual downward trend. The adjustment of supply and demand relationship will also be an important factor in the fluctuation of magnesium prices. Under the pattern of oversupply in the market, there is still significant pressure on the supply side in the future. Pay attention to the price point of 16000. If there is a breakthrough, it is expected that there will be production stoppage on the production end.