Magnesium Market Will Remain in the Vicious Cycle of Continuous Price Drop, unless Demand Picks up

SHANGHAI, Dec 7 (SMM) – Entering December, many places in China experienced extreme cold weather. On December 1 alone, the market quotation for 90# magnesium ingots in Fugu county, Shaanxi province, dropped by 500 yuan/mt, and some producers cut quotations to as low as 22,500 yuan/mt. Due to downstream wait-and-see sentiment, magnesium price fell further to around 22,000 yuan/mt afterwards. Pessimism dominated the market.

According to SMM statistics, since November 16, the price of magnesium had been falling for 12 consecutive working days, with a drop of 2,000 yuan/mt or nearly 8%. The price drop was mainly due to lower raw material price and sluggish demand. Some magnesium factories are now experiencing losses after continuous price fall.  

If magnesium prices still show no signs of bottoming out, downstream buyers will still hold back from buying, which will lead to a vicious cycle of extended downward trend of magnesium prices. 

According to customs statistics, China exported 22,966 mt of magnesium ingots in October 2022, a month-on-month increase of 23%, and a year-on-year decrease of 6%. Exports in the first ten months rose 7% year-on-year. The Christmas holiday and Chinese New Year are drawing near, and it remains to be seen whether overseas orders will improve.