China Abrasive Materials Weekly Price (15th-21st June): Domestic competition pressure increases
The price of China's alumina oxide raw materials began to bottom in mid-April and gradually changed from falling to rising. It has maintained an overall stable and slowly rising trend in the past two months. At present, the price of alumina oxide raw material in China has increased by nearly RMB200/ton from the lowest point in April. It is expected to maintain an upward trend in the short term in the future. This has played a supporting role in China’s white fused alumina prices.
However, due to the impact of the epidemic, the demand in overseas markets is weak, and companies are forced to compete in the domestic market to reduce prices. It is expected that the price of white fused alumina may still weaken in the next week.
Recently, as the overseas market has not yet recovered, the orders for the export of brown fused alumina are decreasing, companies are forced to squeeze competition in the domestic market, and the prices of brown fused alumina are facing downward pressure. In addition, because there are no newly developed mines, the supply of high-grade cooked bauxite continues to be tight, causing the brown fused alumina market to enter high cost and low profit situation, and some companies' low-profit models barely maintain their operations.
Under this situation of unprofitable competitive incentives and weak demand, a large scale of factories chose to suspend production. Among them, the brown fused alumina enterprises in Sanmenxia area in Henan Province mostly stopped production. Some enterprises have considered withdrawing from the brown aluminum oxide industry. The Luoyang Yichuan area in Henan Province was also affected by the expansion of the southern ring road, causing a small number of enterprises to be forced to stop production and wait for relocation. These increased the uncertainty in the development of the brown aluminium oxide market.
It is expected that in the future, the large-scale shutdown and reduction of the brown fused alumina industry is expected to continue. Despite that the supply of high-grade cooked bauxite is in short supply, transactions remain stable, and the price of brown fused alumina is expected to continue to run smoothly.
3. Black Silicon Carbide
This week, the start-up of black silicon carbide production enterprises in China is basically stable, and most manufacturers tend to reduce product prices to promote transactions to achieve a fast-in and fast-out state of the company in order to reduce operating pressure. In terms of raw materials, the price of anthracite rose slightly, and if the demand is stable, it may effectively reduce the risk of the continued downward price of silicon carbide. It is estimated that in the coming week, the price of black silicon carbide in China may run weakly and steadily.
4. Green Silicon Carbide
This week, due to weak demand in the downstream market and slow transactions, China's green silicon carbide prices continued to fall from last week.