Analysis and forecast of price trend of raw and auxiliary materials for foundry (3)

4, lead ingot

According to the International Lead and Zinc Research Organization, the global lead market supply gap was 63,000 tons in 2006; the supply gap in 2007 was 136,000 tons. In 2007, refined lead production increased by 1.1% compared with the same period of last year. However, Ivernia's Magellan mine, which accounts for 3.5% of global lead production in 2008, may resume exports, which will change the fundamentals of lead.

On the domestic front, in order to avoid excessive expansion of the domestic low-end lead production industry, excessive pollution emissions, and high energy consumption levels, the Ministry of Finance's Customs Department is studying to increase the refined lead export tariff from the current 10% to 15%. The rapid expansion of production capacity of domestically produced lead has led to overcapacity and reduced export demand, which will aggravate the oversupply situation in the domestic market and increase the pressure on the price market.

As can be seen from Figure 4, the price has continued to rise in 2007, breaking through 20,000 yuan in July and reaching the highest price of 24,860 yuan in August. Since 2008, the price has not dropped significantly. In view of the fact that the demand for lead is still greater than the supply, it is predicted that the price of lead ingots will continue to rise in the second half of 2008.

Figure 4 Lead price chart from 2007 to May 2008

5, nickel plate

In 2007, the world's annual output was 1.48 million tons, higher than the 1.36 million tons in 2006; the consumption was 1.41 million tons, higher than the 1.39 million tons in 2006. In 2007, China's nickel demand increased, but consumption in Europe declined, which led to the price trend as seen in Figure 5: since June 2007, the price has been at a low level and continues to decline. However, in 2008, we believe that the change in supply side is still the basis for the future trend of metal nickel; we still tend to be optimistic about emerging economies such as China, and the planned output of several major stainless steel producers such as TISCO in 2008. Steel plans to produce about 3 million tons of stainless steel in 2008. In 2007, Taigang's stainless steel production was only 2 million tons. Baosteel plans to produce 1.2 million tons of stainless steel in 2008, an increase of more than 200,000 tons from 2007. Other steel producers such as Zhangpu and Lianzhong have a planned total output of nearly 2 million tons in 2008. Therefore, China's 2008 stainless steel output is still in a strong growth momentum, which is bound to attract more demand to return to metal. On nickel, the trend of nickel prices can form a real support.

In view of this, I personally think that the trend of metallic nickel in 2008 can still maintain quite a lot of optimism, although the cyclical factors will temporarily restrict the rising space of metal nickel prices, but in the long run, the status of high-priced nickel is difficult to reverse. We mainly judge from the perspective of metal supply and demand side and the depreciation of the US dollar. We predict that the price of nickel plate will fluctuate in the second half of 2008, and there will be no ups and downs in the absence of special circumstances.

Figure 5 Price chart of nickel plate from 2007 to May 2008

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