High Price of Material Leads to Long-run Loss

   In the current contract price formula, the cost factor of magnesium oxide occupies more than 70 percents. The rest factor is magnesium oxide price. Because the price of raw material such as high, and the Chinese supply quantity is increasing rapidly. Since the beginning of the year, the Asian magnesium oxide manufacturers are in loss money all the time.

   Magnesium oxide manufacturers demand that some end-users should assure contract price next year according to 30% of cost and 70% of average spot price. If conforms to the new formula, Chinese end users need to pay more money when purchase magnesium oxide for long term contract. The new formula acquires the magnesium oxide has a higher price than the current. According to the analysis from Meishen Technology, the reason why Chinese purchasers are not easy to accept the new pricing model is that it adds to cost obviously. What’s more, the domestic supply is enough sufficient. Just because China has a large number of magnesium oxide, the price decreases a lot. However, the requirements of newly-built downstream equipment need’s commissioning is increasing continuously, the price gets a support.

   In each year, Meishen Technology analyzes the national policy and planning analysis of magnesium oxide manufacturer, the product technical parameter, production technology, product cost structure and so on. And then, it counts Chinese main magnesium oxide manufacturers’ capacity, output, cost, price, gross margin, output value and other detail data. At the same time, it counts these manufacturers’ magnesium oxide products, customers, applications, capacity, market position, contact way and other information. In the end, after tabulate statistics and summarize it, Meishen Technology gains the market shares of Chinese magnesium oxide capacity, supply, quantity demanded, relation between supply and demand, import volume, export volume, measure of consumption and other data. Combining with the magnesium oxide industry’s upper raw material, downstream customer and diagnoses, it drafts the magnesium oxide industry development tendency and strategy suggestion to assure the investment feasibility of next year’s magnesium oxide new project.