Xenon is an indispensable part of aerospace and semiconductor applications, and the market price has risen again recently. China’s xenon supply is declining, and the market is active. As the market supply shortage continues, the bullish atmosphere is strong.
1. The market price of xenon has risen sharply
China’s domestic high-purity xenon companies mainly supply long-term customers, and most of the main production companies have infinite distribution, and the distribution customers get higher prices.
From the end of November to now, the market transaction price has risen by about 13% in half a month. At present, the overall channel inventory in the market is low, terminal purchases are active, and the bullish atmosphere is strong.
2. Multiple factors on the supply and demand side support the market
The tightening of the xenon market supply and the active downstream procurement are the main reasons for the rapid increase in market prices.
First of all, the escalation of the situation in Ukraine has also triggered market expectations of supply tightening, and the risk of xenon supply tightening and transportation after being restricted. At the same time, the new round of the epidemic has also triggered market concerns about the stability of the supply of goods, which has led to a significant increase in market purchases.
In addition, China’s domestic xenon market supply is also showing a tightening situation. Mainly affected by policies such as production restrictions in the steel industry and related power restrictions, the raw material liquid is significantly restricted, and the actual production of xenon gas has been reduced by about 50% compared with normal conditions.
In terms of downstream demand, aerospace demand may continue to increase, and semiconductor market demand is still strongly supported.
3. The short-term market may still have room for growth
Under the dual control of energy consumption in China starting in the autumn of 2021, the production of krypton and xenon will be significantly affected, and related policy changes in 2022 will also be an important influencing factor. In addition, for the demand side, whether the downstream semiconductor production process changes and whether the amount will be reduced are also important factors. The uncontrollability of downstream demand, geopolitical risks, and the development of global public health events have brought great changes to the market. On the whole, China’s xenon market should be cautiously optimistic in 2022.
Post time: Dec-22-2021
