Magnesium Prices Fell, The Support of High Cost Emerged

SHANGHAI, Jun 2 (SMM) -

 Magnesium prices continued to fall this week. After falling below 30,000 yuan/mt, it fell to 27,500 yuan/mt. Some magnesium factories were unwilling to sell cargoes at low prices. Magnesium prices remained stable.

 On the supply side, some factories said that there will be a maintenance plan in June, and the average operating rate of the industry remained high. At the same time, with the decline of magnesium prices, the support from the cost side gradually emerged, and the plants were less willing to lower prices amid shrinking profits. On the downstream side, the magnesium prices fell below 30,000 yuan/mt, creating wait-and-see sentiment in the downstream. However, considering that the domestic pandemic has been effectively controlled, the downstream demand is expected to be further increased in the future. The increase in rigid demand and the shrinking of industry profits may force the prices of magnesium to slow down the decline.

 SMM analysis believes that the prices of magnesium are still facing greater downward pressure amid the oversupply. But considering that with the increase in market demand and the gradual emergence of support from the cost side, the process of the rebound of magnesium prices may be advanced. SMM will continue to focus on the follow-up transactions.