SMM Analysis On China October Magnesium Ingot Production And November Forecast

According to SMM data, China's magnesium ingot production in October 2024 increased by 2.9% MoM. In October, smelters in the magnesium ingot market saw both production increases and decreases. The reasons for the decrease in magnesium ingot production were: firstly, normal maintenance of magnesium ingot smelters during the summer, with the original plan to resume production in early October, but due to weak market demand, the production resumption plans were postponed to mid-October. Secondly, some companies reduced production or halted operations due to sluggish end-use demand. The reasons for the increase in magnesium ingot production were: firstly, smelters that had previously halted production for maintenance gradually resumed operations, leading to an increase in magnesium ingot supply. Secondly, some manufacturers adjusted their daily production based on their orders and inventory levels.

In early November, China's magnesium ingot market overall showed a stalemate in supply and demand. Due to weak downstream demand and a lack of supportive factors in the raw materials market, industry insiders had a bearish sentiment, resulting in insufficient upward momentum for magnesium ingot prices. On the other hand, as magnesium ingot prices fell to the lowest level of the year, approaching the threshold of 17,000 yuan/mt, close to the breakeven point for many plants, smelters' sentiment to stand firm on quotes may strengthen. It is expected that magnesium ingot prices will fluctuate rangebound in November. As market prices fall below the breakeven point for smelters, one smelter plans to reduce production in November. Considering that two smelters are expected to resume production in November, it is anticipated that magnesium ingot production will increase to 77,000 mt.