Shaanxi Magnesium Ingot Costs Drop 6.1% Weekly, Industry Profits Thin Despite Turnaround

【SMM Weekly Magnesium Inventory Briefing】This week, the national inventory of primary magnesium smelting enterprises increased by 1.33% month-on-month. While primary magnesium smelting enterprises in major production regions suspended production for maintenance this week, leading to a notable reduction in supply pressure, the inventory of magnesium ingots still registered an upward trend. The primary reason is that driven by the sharp surge in coal prices, magnesium prices have risen substantially, and quotations from primary magnesium smelting enterprises remain at a high level. Meanwhile, holders are offloading goods in the market at low prices, and most market transactions are concentrated on digesting social inventories, which has diverted the already scarce purchase orders, resulting in a slight increase in magnesium ingot inventory.

【SMM Weekly Magnesium Output Flash Report】From September 4 to September 10, the weekly output of national sample magnesium plants decreased by 4.1% month-on-month, with the weekly operating rate standing at 73.44%. According to research, affected by rising raw material prices that have pushed up production costs, multiple primary magnesium enterprises announced maintenance this week. Among them, three primary magnesium smelting enterprises suspended production for maintenance and two reduced output, leading to a notable decline in magnesium ingot production. It is understood that the maintenance period for manufacturers this week is expected to be around 10 days, and primary magnesium output is projected to remain at a low level and move sideways next week.

【SMM Magnesium Flash】This week, the social inventory of magnesium ingots decreased by 3.2% month-on-month, showing a trend of destocking. At the beginning of the week, domestic magnesium ingot prices continued to rise. Downstream customers and traders exhibited a strong aversion to high prices, and there were no large-scale proactive stock-up operations. Only rigid demand transactions were maintained, and market trading was relatively weak. Against the backdrop of rising ex-factory prices for magnesium ingots and no substantial recovery in demand, traders took the initiative to clear early low-priced stockpiles. As a result, the inventory transitioned from the previous pattern of accumulation to destocking. The continuous release of low-priced supply suppressed magnesium prices, coupled with the market mentality of "buying when prices rise and not buying when prices fall," the market continued to operate under pressure.