In January, the average monthly price of 9990 magnesium ingots in the main producing area was 20,190 yuan/ton, down 1.2% month-on-month. Looking at January as a whole: At the beginning of the month, bearish sentiment still prevailed in the magnesium market, with prices continuing the previous year's decline, falling to 20,100 yuan/ton. Magnesium prices once again approached the cost margin, leading to increased willingness among magnesium plants to support prices. In the middle of the month, downstream sectors gradually entered the market for procurement, restoring confidence, and factory quotations rose accordingly. Magnesium market prices rose to 20,500 yuan/ton, causing downstream markets to once again reduce their acceptance of prices. Only a few enterprises made small purchases for immediate needs, leading to a subdued trading atmosphere in the magnesium market, and magnesium ingot prices fell again. By the end of the month, downstream pre-holiday stocking was nearing completion, and terminal stocking sentiment gradually receded. The downward trend in magnesium prices continued, with the mainstream market transaction prices for 9990 magnesium ingots in the main producing areas falling to 20,000-20,100 yuan/ton as of January 30, 2023.
What Happened on Supply Side? According to information from the main magnesium ingot producing areas, apart from some magnesium plants reducing production or shutting down, most magnesium plants maintained stable production rates during the Spring Festival period. Therefore, the overall output of magnesium ingots during the holiday period only saw a slight decrease. Most traders hold a pessimistic outlook on the price trend of magnesium ingots for the new year, so they have stopped trading early to observe and await the holiday.
What Happened on Demand Side? Approaching the end of the year, pre-holiday stocking by downstream customers has already ended. Coupled with widespread snowfall affecting some areas, demand has weakened, leading to quiet trading in spot transactions. It is expected that during the Spring Festival period, downstream markets will mainly consume magnesium ingot inventories. Overall, at this stage, even in the first quarter, domestic magnesium plants are in an inventory accumulation phase. However, considering that magnesium prices are already close to the cost line, magnesium prices are expected to fluctuate narrowly at the current price level, with limited ups and downs.
Let's see what will happen next, if you wish to continue follow the real time magnesium market trend, do not hesitate to contact: katewang@smm.cn
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