China’s magnesium ingot production increased by 11% MoM in January [SMM Analysis]

SMM data shows that China's magnesium ingot production in January 2024 was 67,327 mt, up 11% MoM and 5% YoY.

In January 2024, magnesium plants that were suspended due to semi coke's rectification gradually resumed production, and the output of magnesium plants that have recently resumed production has slowly increased. There are also companies that have reduced production this month. The reasons for the reduction are: The price of magnesium ingots came under downward pressure in January, and the profit margins of magnesium plants have been repeatedly compressed. The current magnesium price is close to the factory cost line, and the confidence of industry insiders has been frustrated. Some magnesium plants reduced the operating rate or stopped production to reduce the supply of magnesium ingots. Generally speaking, the decrease in output is less than the increase in output, so the overall output of magnesium ingots increased in January. During the CNY, some magnesium plants may reduce their operating rates to alleviate the inventory pressure caused by the rapid accumulation of magnesium ingot inventories. Secondly, considering that the magnesium price is approaching 20,000 yuan and overseas demand has not yet returned, if the decline in magnesium prices continues, magnesium plants may reduce production to stabilize magnesium price.SMM predicts that magnesium ingot production will fall in February.