Sluggish Demand Continued to Weigh on Magnesium Prices

SHANGHAI, Dec 14 (SMM) - The mainstream traded prices of Mg90% magnesium ingots in Fugu county, Shaanxi province were around 21,800 yuan/mt on December 14, down by 100 yuan/mt from a day earlier.

The sluggish domestic demand was responsible for the continuous decline in magnesium ingot prices, and most factories quoted based on actual orders.

According to the feedback from magnesium factories, the downstream demand has not improved significantly yet as of the middle of the month. Buyers were inclined to bid down prices, thus the domestic transaction prices dropped still, further fuelling the bearish sentiment in the market. Some factories already cut their production to cope with the increasing losses. On the other hand, the prices of semi-coke will also directly affect the overall profitability of magnesium factories. Recently, the domestic semi-coke price showed a downward trend due to sluggish downstream demand. Even though favourable policies were rolled out this week, the transaction prices of semi-coke in the spot market still stagnated at around 1,650 yuan/mt. The persistent losses brought by semi-coke in comparison with the coke continued to pressure magnesium plants.

Considering the unsatisfactory overseas orders and the ongoing domestic weak demand, it is expected that the subsequent magnesium prices will still face downward pressure if there is no improvement in the supply-demand structure.