Analysis of export situation of light burned magnesium powder

I. Export situation

    According to customs statistics, from January to September, China's light and heavy burnt magnesium exports totaled 937,000 tons, up 12.3% year-on-year; the export value was 346 million US dollars, down 15.7% year-on-year; the average unit price was 36. 9 US dollars / ton, down 24.9% year-on-year. The top six export markets were followed by the Netherlands with 283,000 tons, accounting for 30.2% of total exports; Japan's 176,000 tons, accounting for 18.8%; the United States with 175,000 tons, accounting for 18.7%; and South Korea's 51,000 tons, accounting for 5.5%; Taiwan Province has 29,000 tons, accounting for 3.2%; Russia has 24,000 tons, accounting for 2.6%.

Second, the analysis of the export situation of light and heavy burned magnesium

    The export situation of China's light burnt magnesium powder has become increasingly severe, and external demand has been deteriorating. In May, the annual meeting of the magnesia held in Salzburg, Austria, was filled with pessimism and disappointment. Global refractory manufacturers generally underemployed and demanded raw materials. Drastically reduced, only 70% of the normal level. The industry generally believes that the low level of the first half of 2012 far exceeds 2009. However, the number of exports reflected in customs export statistics has increased substantially. This reality and the divergence of data are mainly caused by the interception of cargo statistics for export at the end of 2011 to the beginning of 2012. While the number has increased substantially, the amount of exports has declined. The scissors difference in this kind of statistics just shows that the market is in a continuous decline.

    From the current product transaction price analysis, the actual transaction price of light burned magnesium powder 9010 is about FOB230 USD/ton, which is about 30% lower than the beginning of the year; the price of light burnt magnesium 94 is about FOB220 USD/ton, which is about 35 lower than the beginning of the year. The price of fused magnesium 97 is about FOB660/ton, which is about 20% lower than the beginning of the year. Such a price level is already close to the cost line, and there is no profit in the cost accounting of enterprises in the formal financial system. However, the downward pressure on prices is still very large.

    There are two main reasons for the low market demand:

    1. The European debt crisis has led to continued turmoil in the international financial situation. The recovery of the real economy lacks a stable financial environment and consumer demand. The debt problem has forced major developed countries, especially European governments, to reduce fiscal expenditures, making the government's means and efforts to stimulate economic development severely weakened. Households' consumption of real estate, automobiles, electrical appliances and other products continues to be weak, leading to steel, building materials and industrial ceramics. There is a backlog of industrial products and insufficient work, and the demand for refractory raw materials such as light and heavy burnt magnesium has fallen sharply.

    2. Domestic companies’ concerns about insufficient demand in foreign markets began to ferment. Enterprises are worried about the loss of performance at the end of the year, and even suffered penalties, and began to cut prices to buy goods. This price cut has spread rapidly, and exports have been flat with costs in October, reaching the lowest point in nearly four years. At the low price level, foreign customers began to purchase in large quantities, and the shipment volume in the fourth quarter of 2011 reached more than 400,000 tons. At present, foreign users have a large amount of inventory, and individual varieties can be used until the end of 2012.

    3. The pattern of the international light and heavy burnt magnesium market has changed. Due to the rapid and sharp increase in the price of China's light and heavy burned magnesium products in 2006-2008, foreign users were forced to find other supply channels. After four years of adjustment, the global supply pattern of light and heavy burnt magnesium has undergone some changes. For example: Austria's Austrian Magnesium Group, the world's largest refractory producer, has invested 80,000 tons of fused magnesium plants in Norway; Brazil's magnesium industry has set a plan to increase production capacity by 120,000 tons and has completed 60,000 tons; Turkey, Russia Started to invest in the production of fused magnesium; North Korea's light burnt magnesium is also increasing through the number of re-exports in China. These new capacity and supply capacity have occupied the market share of China's products. Originally, China's light and heavy magnesium exports accounted for about 65% of international trade, and currently only 55%.

    The lack of demand, inventory backlog, and share reduction made the export in the first three quarters of this year extremely difficult.

    Third, the domestic industry operation

    The magnesia industry is currently facing three more serious problems. First, insufficient demand, poor sales, and product backlog. Second, the sales price has been declining, production costs have fluctuated at a high level, and the company's living space has been severely compressed. Third, the capital withdrawal period has been extended and sales have been carried out. The increase in costs and the increase in operational risks; the fourth is the under-employment, the industry's production stoppage continues to expand, and the current average production stoppage is estimated to be as high as 40%.

    Fourth, the recent situation forecast

    Recently, with the "stable growth" of the Chinese government, various policies will be introduced one after another, and the overall economic growth rate should be able to achieve the 8% target. However, there are still many uncertain factors in whether the overall lack of demand can be reversed. In particular, the cyclical industries such as domestic steel, nonferrous metals and building materials are unlikely to rebound in the short term. The pressure on domestic refractory raw materials is very high, and it is impossible to rule out the possibility that the price of light and heavy magnesium products will be further lowered. The industry's most difficult has not yet arrived, and the lowest point of the year may appear in the fourth quarter.