Magnesium Prices Remain on the Wane

SHANGHAI, Dec 12 (SMM) - The mainstream traded prices of Mg90% magnesium ingots in Fugu county, Shaanxi province were around 22,000 yuan/mt on December 12, which was 100 yuan/mt lower than last Friday. At the beginning of this week, magnesium prices continued to drop, while there was still room for negotiation as expressed by some producers who were under high pressure to sell. According to the feedback from the factories, the downstream demand hardly picked up in mid-December, and they were suffering losses based on the current market transaction prices of magnesium. In response, some plants in the main producing region already cut their production. It is expected that the operating rates of magnesium plants will also be affected by the spreading covid-19 pandemic. Therefore, the oversupply in the market might be alleviated in the future. In terms of demand, the magnesium demand from some overseas terminal enterprises remained weak when the price was around $3,175/mt FOB China. Although the quotations of traders stayed low, some terminal enterprises still stood wait-and see. SMM believes that the market has been rather bearish on magnesium prices due to insufficient support from downstream demand support, and the prices will continued to be suppressed by the high inventory of magnesium plants. If the foreign trades fails to thrive in the future, then magnesium prices will decline further.