February this year is the Spring Festival, coupled with the convening of the Winter Olympics, refractory industry chain enterprises stopped production early, late resumption of production, before mid-February is basically in a state of closure, the transaction is light, after the Winter Olympics, brown fused alumina enterprises concentrated on resumption of work and production, although downstream enterprises have resumed production, but its resumption of production speed and production capacity release are not as good as brown corundum, therefore, the situation of oversupply of brown corundum may continue, but the contradiction between strong supply and weak demand will gradually weaken, in March, the terminal steel enterprises blast furnace resumption of production is expected to increase, and the contradiction between supply and demand is expected to be further repaired, and thanks to the strong support of costs, it is expected that the domestic price of brown fused alumina in March may first decline and then rise. The following Sun Hung Kai will make a brief analysis from the aspects of price, supply and demand, and cost.
1. The price still has room to explore, at the end of February, the domestic brown fused alumina market weakened, of which the price of brown fused alumina in Henan and Guizhou has declined, with a downward adjustment of 100 yuan/ton, and the brown fused alumina market in Shanxi is stable. From the perspective of regional price differences, the sales pressure in Shanxi is greater, from the price trend of brown fused alumina in the three main producing areas, the current price of brown fused alumina is at a high level year-on-year, in the repair period of supply and demand contradictions, the brown fused alumina market still has room for decline, and the weak operation may continue until mid-March.
2. Brown fused alumina production capacity is rapidly released Strong supply and weak demand continue in the repair From Mysteel research data, the domestic brown fused alumina production capacity was quickly released after the Winter Olympics, as of February 24, the domestic brown fused alumina smelting furnace operating rate of 52%, has reached the normal level of pre-holiday production, capacity utilization rate of 45.28%, because most enterprises only began smelting after the 20th, so the production rhythm is slow, there is still room for improvement, so the supply of brown fused alumina in March is stronger. From the perspective of demand, according to the Mysteel survey on February 25, the blast furnace start-up and capacity utilization rate were 73.44% and 77.61% respectively, up 3.85% and 2.17% week-on-week, and down 16.06% and 15.11% year-on-year respectively, which were at a low level. Entering March, the convening of the two sessions and the Paralympic Games, the resumption of blast furnace production may be delayed, the demand release rate is not as expected, and the situation of strong supply and weak demand for brown fused alumina may continue. After mid-March, the blast furnace is expected to resume production intensively, and the demand for refractory materials will be released, and the mismatch between supply and demand of brown fused alumina may be repaired in late March.
3. The biggest factor affecting the price of brown fused alumina is the cost of lightly burned bauxite and electricity prices, and it has been found that the impact of restricting the development of bauxite mines and the rise in natural gas prices has increased the prices of lightly burned bauxite in Shanxi, Henan and Guizhou in three regions, and at the same time, the supply is tightening. At the same time, graphite electrodes and iron filings for smelting have risen, and the production cost of brown fused alumina is high and strong.
4. Domestic brown fused alumina market outlook in March
At present, the brown fused alumina market is in the stage of supply and demand recovery, the supply side of the recovery speed is faster than the demand side, it is difficult to quickly reach the supply and demand balance point in a short period of time, brown fused alumina prices still have room to fall, at the same time, after mid-March, the strong expectation of the resumption of blast furnace production, boost the mentality of suppliers, coupled with the strong support of high cost and the current situation of low inventory, it is expected that the brown fused alumina market will show a trend of first suppressing and then rising in March.