SMM Weekly: Magnesium Inventory Rises 3.4% MoM Amid Production Halts and Weak Demand

[Magnesium Plant Maintenance Dragged Down Weekly Output, Supply Strong and Demand Weak with Continuous Inventory Buildup] This week, the magnesium ingot market in the main production areas retreated after a rapid rise. At the beginning of the week, maintenance positives supported prices, but high downstream inventories and fear of high prices suppressed transactions, with some producers offering discounts to sell, putting magnesium prices under pressure and causing them to weaken. Tianjin port FOB prices passively followed the decline in China’s EXW prices, as sluggish demand during the summer break outside China and elevated ocean freight rates suppressed deals. Dolomite prices were stable, providing limited cost support. Magnesium powder and magnesium alloy prices first declined and then stabilized, following the trend of magnesium ingot. Downstream sectors such as steel mill desulfurization, titanium sponge, and die-casting enterprises entered the off-season, with transactions remaining sluggish, leaving the oversupply pattern unchanged. In the short term, the magnesium market will continue to move sideways.

[SMM Weekly Magnesium Output Briefing] From July 10 to July 16, the weekly output of sampled magnesium plants across the country stood at 22,729 tonnes, with a weekly operating rate of 74.57%, down 2.95% month-on-month. According to surveys, a number of primary magnesium smelting enterprises entered the centralized shutdown and maintenance cycle this week, leading to a continuous decline in the overall operating rate of the industry. Some primary magnesium smelters have resumed production starting this week; considering that a number of producers still have maintenance schedules in the late July, the primary magnesium output will bottom out and stabilize.

【SMM Weekly Magnesium Inventory Express】This week, producer inventories edged up 1.78% month-on-month. On the supply side, multiple primary magnesium smelters in major production regions have suspended production for centralized maintenance, leading to a notable reduction in the industry's spot supply of magnesium metal. On the demand side, constrained by both overseas summer holidays and the off-season of the downstream die-casting sector, market procurement demand has weakened in tandem, putting pressure on the digestion of industrial output. As a result, producer inventories continue to show a rising trend.