Supply side: In the first quarter, the production enthusiasm of magnesium plants continued to decline, and the cumulative output fell by 21% compared with the same period last year.
At the same time, due to the continuous decline in magnesium prices, the profits of magnesium plants were severely reduced and some plants lacking ferrosilicon production facility or raw material inventories faced great cost risks.
After the magnesium prices fell below 20,000 yuan/mt, some factories stopped production due to losses.
The person in charge of a halted magnesium factory said that the downtime may last until October this year. As the factory is located in north China, it is vulnerable to pipeline freezing due to the low temperatures. If the prices of magnesium continue to slump, the plant is likely to remain closed until 2024.
Demand side: In terms of domestic trade, as the recovery of market demand has been slow, downstream enterprises reported a 10-20% drop in orders compared with the same period last year. In terms of foreign trade, the export of magnesium ingots, magnesium alloys, and magnesium powder has declined sharply.
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