Manufacturers' Daily Output Increase Covered Maintenance Reductions, Yet Transaction Recovery Failed to Reverse Plant Inventory Accumulation [SMM Magnesium Weekly Data]

Production and Inventory Briefing

1.1 Weekly Production

During June 12–18, weekly production from sampled magnesium smelters nationwide was 26,498 mt, with a weekly operating rate of 86.93%, up 2.45% WoW. According to surveys, most primary magnesium smelters maintained steady production in May. A primary magnesium smelter in Shaanxi started a maintenance shutdown on June 15, expected to last half a month; a smelter in Shanxi continued maintenance and is expected to restart production at month-end. However, some producers raised daily output this week, with the increase outweighing the decrease, leading to an overall upward trend in weekly production.

1.1 Weekly Inventory

1. Producer inventory edged up 5.23% WoW. In the first half of the week, the primary magnesium market was stagnant, with downstream traders only making just-in-time procurement, leaving overall trading subdued. In the second half, multiple magnesium smelters lowered quotations to boost shipments, leading to a slight recovery in transactions. However, industry operating rates stayed high, and enterprise inventory still showed a slight inventory buildup trend.

2. Social inventory fell 3.00% WoW, showing regional divergence. Driven by the delivery of long-term contracts and production cuts at some producers, destocking in main production areas was relatively significant. Meanwhile, at Tianjin port, low-priced resources prompted traders to stockpile, resulting in a slight inventory buildup. Overall, destocking in main production areas provided some bottom support to magnesium prices, but the inventory buildup at the port reflects continued sluggishness in exports. The short-term supply-demand imbalance still needs to be resolved.