Energy Consumption "Double Control" Strength Increased, Titanium Sponge Was Implicated

The “Dual Control” Of Energy Consumption Has Been Increased, Titanium Sponge Has Been Implicated

Recently, the National Development and Reform Commission directly named nine provinces and districts at a regular press conference: Qinghai, Ningxia, Guangxi, Guangdong, Fujian, Xinjiang, Yunnan, Shaanxi, and Jiangsu. The energy consumption intensity in the first half of September did not decrease but increased year-on-year! In addition, there are 10 provinces whose energy consumption intensity reduction rates have not met the progress requirements, and the national energy conservation situation is very serious.

The National Development and Reform Commission pointed out that all regions should maintain a high degree of vigilance in the severe energy-saving situation in the first half of the year and take strong measures to ensure that the annual dual-control of energy consumption goals, especially the reduction of energy consumption intensity, are achieved.

In response to this phenomenon, Shaanxi Province has actively taken measures to deal with it, and among the measures taken, the most effective and fastest way is to reduce production. According to data from the China Association of Non-ferrous Metals Industries, China's domestic magnesium production increased by 8.13% year-on-year to 434,000 tons from January to June. Shaanxi, as the world's largest magnesium-producing region, produced 302,500 tons in the first half of the year, an increase of 16.92% year-on-year. Shaanxi's production cuts will certainly affect the overall supply of domestic and foreign markets.

Factory mass production, the Price of an unprecedented surge

On the first working day after the Mid-Autumn Festival, I learned from the market that with the increase in the “Dual Control” policy of energy consumption, most magnesium companies in the Shenfu Area, the main producers of domestic magnesium ingots, have been shut down. The time for resumption of work is unknown, waiting for government notice. Today (September 22), the mainstream factories in Fugu area suspended their quotations, and the quotations of individual factories were tentatively set at 60,000 yuan/ton including tax and cash exchange. It is reported that the current high-priced transactions in the market are temporarily unclear. The sudden large-scale shutdown of production has left the industry helpless.

According to the International Magnesium Association, the price of magnesium has risen to its highest level in the past 13 years, and may rise further in the coming months, and then “return to a more normal level by the end of the first half of year 2022.”

The industrial production of #titanium sponge has been more than 70 years since 1948. At present, the only titanium-making method used of industrial production in the world is still the KROLL method, also known as the magnesium heat method. The production process mainly includes the preparation of enriched materials, chlorination, refining of #titanium tetrachloride, reduction distillation, and electrolysis of magnesium chloride. The essence of magnesium reduction is that in an argon atmosphere at 880℃~950℃, titanium tetrachloride is reacted with magnesium metal to obtain sponge-like titanium metal and magnesium chloride. Vacuum distillation removes magnesium chloride and excess magnesium from sponge titanium to obtain pure titanium. The distilled condensate can be melted to recover metal magnesium, and magnesium chloride can be recovered by molten salt electrolysis. Magnesium and chlorine gas.

To manufacture 1 ton of #titanium sponge, about 1.5 tons of magnesium ingots are required, thus there is a large demand for magnesium. This round of skyrocketing magnesium prices will greatly increase the manufacturing cost of titanium sponge. It is reported that #titanium sponge manufacturers have suspended external quotations on the 22nd, and contracts that have not been signed have also been suspended. All this indicates that the price of titanium sponge will most likely undergo major adjustments, and manufacturers and downstream users need to prepare for this early.