How do titanium sponge enterprises respond to the "skysurge" of magnesium ingots?

The price of magnesium ingots has risen sharply, which is rare in history. Once the price soaring becomes a "mad cow", it is often unstoppable. The current surge of magnesium ingots may be like the price of sponge titanium rose from more than 40,000 yuan a ton to 250,000-300,000 yuan from the end of 2004 to 2008, an increase of about 7 times. The price increase of vanadium in the first two years was also crazy, of course, after any craziness, it will eventually return to normal.

To

A set of data comparison

——The price of magnesium ingot on December 31, 2020 is RMB 1.55-156 million/ton. On September 22, 2021, the price of magnesium ingots is between 62 and 62,500 yuan/ton. Increase by more than 4 times;

——The price of titanium tetrachloride is 6500-7000 yuan/ton on December 31, 2020. On September 22, 2021, the price of titanium tetrachloride is 7800-7900 yuan/ton. It rose by 1300-1400 yuan.

——The price of sponge titanium was 64,000 yuan/ton on December 31, 2020. On September 20, 2021, the price of sponge titanium is 67-70 thousand yuan/ton (the quotation has been stopped at present).

To

Cost Analysis of Sponge Titanium

Magnesium ingots and titanium tetrachloride raw materials are the main cost of constituting titanium sponge. According to the theoretical data of 1.1 tons of magnesium ingots and 4 tons of titanium tetrachloride to produce 1 ton of titanium sponge, the cost of this sponge titanium alone is close to 100,000 yuan/ton.

The cost of titanium sponge is not only composed of magnesium ingots and titanium tetrachloride, but also various expenses such as management expenses, financial expenses, depreciation expenses, water and electricity expenses, and labor costs. In this way, the cost of sponge titanium exceeds 100,000 yuan per ton. Ten thousand yuan or 120,000 yuan has been objectively constituted.

The cost composition of titanium sponge enterprises is also different. The cost of titanium sponge for private enterprises is slightly lower than that of state-owned enterprises, and the cost of titanium sponge for full-process enterprises is significantly better than that of semi-process enterprises. A full-process enterprise needs about 0.15 tons of magnesium ingots to produce one ton of sponge titanium, and a half-process enterprise needs about 1.1 tons of magnesium ingots.

To

Factors affecting the price of sponge titanium

There are many factors that influence the price of sponge titanium, and the main influential factors are as follows:

1. The price increase of raw materials promoted. For example, the rise of the main raw materials magnesium ingot and titanium tetrachloride will inevitably affect the price of sponge titanium, as well as the rise of electricity costs, labor costs, and financial costs. These are all factors that affect the price of sponge titanium.

2. The downstream market just needs to increase in new applications on the basis of stock, and the increase in rigid demand will inevitably stimulate the price of sponge titanium. For example, the expansion of the military product field and the expansion of the civilian product application field in recent years are all factors that stimulate the production and price increase of sponge titanium.

3. The change of sponge titanium production capacity affects the price change. In recent years, the downstream market just needed titanium sponge obviously showed a flexible growth trend, but the price of titanium sponge has not returned to the price of 250,000 to 300,000 yuan in 2004-2008, and it can only be 55,000-85,000 in two or three years. Fluctuations between 10,000 yuan (a large amount of time fluctuated around 60,000 yuan), because the production capacity of sponge titanium was expanded too fast, and the actual output increased too sharply: about 85,000 tons in 2019, 123,000 tons in 2020, and 150,000 tons in 2021. Around tons. At present, due to the skyrocketing rise of magnesium ingots, titanium sponge enterprises are facing production restrictions, production reductions and even some halts. The production of titanium sponge in 2021 may increase slightly on the basis of 2020.

To

The embarrassing titanium sponge market

Magnesium ingots have skyrocketed, and the price of sponge titanium has become inevitable, and it is not the tentative rise of 2,000 yuan in the past, it must be a rise of tens of thousands or even tens of thousands of yuan per ton. No matter how the price of sponge titanium is adjusted, the current situation of sponge titanium is very embarrassing for the following reasons:

1. The sharp rise of upstream raw materials has caused the cost of titanium sponge to exceed 100,000 yuan/ton. The current price of 60,000-70,000 yuan is impossible to continue. The only option must be a large price adjustment, and the price must exceed 100,000 yuan to maintain production. .

2. The upstream raw materials force titanium sponge companies to adjust prices. In addition to the military market, orders for the civilian market have decreased significantly in the downstream. Therefore, the embarrassing situation of titanium sponge is that the price must rise sharply, and on the other hand, it has to face orders from the civilian market. Fall back.

3. When the price of sponge titanium rises sharply, the titanium market will change in volatility, and the downstream downstream may have material substitution thinking after March or May. The market has an invisible hand that regulates the mutual development of industries.

4. When the price of domestic titanium sponge is adjusted substantially, will the import of foreign titanium sponge increase?

5. After the price of titanium sponge rose sharply from 2004 to 2010, resulting in a severe overcapacity and a sharp drop in prices, the state once purchased and stored tens of thousands of tons of titanium sponge and titanium ingots. When the price of titanium sponge exceeded 100,000 yuan, 110,000 yuan, and 12 Will the national reserve of titanium be put on the market for 10,000 yuan a ton? The possibility of placing them as strategic materials is relatively small, but the possibility of placing them on the market is not ruled out.

How does the titanium industry respond to the "skysurge" of magnesium ingots?

Due to the soaring of magnesium ingots and the upside-down of the price and cost of titanium sponge, titanium sponge companies have stopped quoting, and the market has suspended the sale of titanium sponge. Of course, the suspension of the sale of titanium sponge is not because the supply is in short supply, but the sales will lose, especially now that the production will be lost. Therefore, only a sharp price adjustment can accumulate energy for survival and development, otherwise the snowball will roll and become smaller and will face life and death. Magnesium ingots are soaring, how should sponge titanium companies respond? How to face the future is a problem to be solved!

It is also inevitable to reduce production and shrinkage among sponge titanium enterprises. This is the general trend of market regulation and a correction for the excessive expansion of production capacity in recent years. During the "14th Five-Year Plan" period, the sponge titanium industry is facing reshuffle and reorganization, which is the general trend.

According to the skyrocketing upstream raw material magnesium ingot, the price of sponge titanium should be adjusted as soon as possible. The method of stopping quotation and suspension of sales is contrary to market rules, which is not conducive to the production of the downstream market, but will cause "downstream" customers to find substitutes as soon as possible. , The long-term is very unfavorable to the development of the titanium industry.

In the future, we will further devote our energy to technological innovation, quality improvement, and high-quality development. The current sponge titanium market is "not enough for high-end, and more for low-end." Therefore, fine quality and light quantity are the general direction of titanium sponge enterprises.

After the price of titanium sponge is increased sharply, it is necessary to pay attention to the changes in the quantity of imported titanium sponge. Don't let the price increase of titanium sponge lead to the profit of foreign titanium sponge enterprises.

To

No matter how the magnesium ingots skyrocket, the development of the titanium industry is still promising, but the future development needs to be more refined, finer, better, and more specialized. Only those titanium and titanium processing materials companies that pursue high-quality development will go far and go. For a long time, go well. The soaring of magnesium ingots has only accelerated the pace of adjustment of the titanium industry, which is a boost to the optimization of the development of the titanium industry, and it is also a boost to the high-quality development of the titanium industry. In the future, only the strong will be Hengqiang among the enterprises in the development of the industry.