ferrite magnets
The reason and impact of the main raw material price increase of permanent ferrite
Jan 11,2021.

Permanent ferrite is one of the three main magnets in the magnetic material industry, and it is widely used in various fields of manufacturing. my country is a major producer of permanent ferrite products, with an output of 800,000 tons in 2016 and more than 600 manufacturers. With the gradual recovery of the world economy and the rapid development of my country's economy, my country's permanent ferrite industry has developed well this year, and its production and sales have shown rapid growth.

 However, in recent years, the prices of the main raw materials of permanent ferrites have been rising all the way, which seems to have a tendency to "overwhelm the golden mountains", causing the whole industry to become anxious frequently. First, the price of strontium carbonate has risen sharply, from 4,300 yuan/ton at the beginning of the year, to 4,900 yuan/ton in October, and then to 6,800 yuan/ton now. This is still the batch price, and the small batch market price has reached 7500 yuan/ton. The second is the serious imbalance between supply and demand and the serious shortage of supply. Calculated from the total demand of the industry, my country's permanent magnet ferrite needs about 120,000 tons of strontium carbonate each year, with an average of about 10,000 tons per month. According to the current understanding, the production restriction and suspension of strontium carbonate have become an industry phenomenon after October this year. The production capacity has dropped from more than 20,000 tons per month to more than 5,000 tons, and only about 40% of them are supplied to the permanent ferrite industry. This shows that industry shortages can be imagined. Third, the price of cobalt raw materials has continued to rise since the beginning of the year, starting from 130,000 yuan/ton last year and rising to the current 350,000 yuan/ton, which is expected to reach a high of 400,000 yuan.

 The main reason for the rapid increase in the above raw materials is that due to the centralized actions of national environmental inspections, smog remediation and corporate rectification, the production of strontium carbonate concentrated areas and many larger manufacturers have suspended work and restricted production. Large enterprises such as Hebei Xinji, Zhengding, Shandong Zaozhuang and Hongdie basically stopped production, Nanjing Jinyan limited production by 50%, and most of those small enterprises were also in a state of suspension. The shortage of raw materials has sharply pushed up the price of strontium carbonate.

 At the same time, my country's cobalt resources are very scarce. Low-grade, high-impurity, difficult to process, mostly imported from Congo and other countries. The country's strong support for new energy vehicles has promoted the rapid development of the industry. The demand for cobalt for new energy vehicles has increased significantly, which has greatly impacted the price market of cobalt, causing the price of cobalt to continue to rise since the beginning of the year, and it is very strong. From the perspective of expectations, strontium carbonate will complete the phased industrial rectification in March next year, and the environmental protection and smog factors will come to an end and will be alleviated. However, due to the inertial effect of large-scale enterprise closures and high prices, it is difficult for prices to drop sharply, falling to around 6,000 yuan/ton, which is expected to fluctuate for a longer period of time. This judgment is based on the difficulty of strontium carbonate pollution remediation. Strontium carbonate enterprises are basically enterprises led by the word "chemical". The fear of "chemical" in the society has made it the focus of environmental protection. Under environmental protection concerns and high pressure, it is unlikely that strontium carbonate companies can restore their original production capacity. The price of cobalt raw materials is expected to continue to rise. The large-scale entry of the new energy industry will cost more and less porridge.

Strong Ceramic/Ferrite Magnets

 Impact:

 The rapid increase in the price of strontium carbonate and cobalt raw materials has a positive impact on the permanent ferrite industry, which has brought great adverse effects and greatly increased the cost of production enterprises. If the policy factors of the steel industry in the country’s compulsory reduction of production capacity are superimposed, the price of iron phosphorus and iron red is expected to rise, and the pressure on the price of permanent ferrite raw materials can be even worse, and the company will be overwhelmed.

 Take magnet tiles as an example. Generally, the original price of 6-material products per ton of pre-fired material is around 2,600 a ton. It is roughly estimated that per ton of pre-burned material mixed with strontium material is about 10%, which is equivalent to an increase of more than 400 yuan per ton. If the price increase of cobalt material is added, the cost of 6-material magnet tiles per ton will increase by about RMB 1,800, and the cost per ton of magnet tiles will increase by about 12%. Taking speaker magnets as an example, the cost per ton of pre-fired material increases by about 400 yuan, which is equivalent to an increase of more than 10% per ton of magnet steel. In other words, if the cost of material price increase is allocated to the sales price of magnet tiles and speaker magnets, only an increase of 6-8% and more than 10% can dilute the pressure of raw material price increases.

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