Insufficient Support: Magnesium Prices Fluctuate Downward [SMM Analysis]

After the holiday, the magnesium market remained sluggish. Affected by persistently weak downstream demand, some factories showed a high willingness to sell in order to quickly secure profits, with selling prices negotiable for actual transactions. The overall market price of magnesium ingots exhibited a downward trend.

 According to information from factories in major production areas, with the earlier acquisition and storage efforts proceeding smoothly, the issue of inventory buildup on the supply side has been effectively alleviated. The current challenge for the market lies in finding a price point that can effectively balance the supply and demand structure under the premise of persistently weak downstream demand. A sales representative from a large magnesium factory stated that under the pressure of raw materials fluctuating downward, market confidence is generally insufficient. It will take some time to consume the original inventory, and price corrections under pressure are inevitable before demand recovers. However, as magnesium ingot inventories continue to deplete, it is only a matter of time before market confidence in magnesium prices returns.

 Through sampling surveys of different types of downstream sectors, SMM found that insufficient short-term end-use demand support will remain the main reason for magnesium prices being under downward pressure. Considering that as magnesium prices continue to bottom out, the willingness to sell from shutdown factories is rapidly declining, and panic selling actions on the supply side may ease. In the short term, magnesium prices are expected to face weak consolidation. SMM will continue to monitor subsequent changes in spot transactions.