[Magnesium Ingot Downstream Demand Situation]
Magnesium Alloy Market Demand Situation:
In September, China's auto sales showed a YoY decline. According to CAAM, auto sales in September fell by 1.7% YoY.
SMM data indicates that in September 2024, China's magnesium alloy production slightly decreased MoM. The operating rate of downstream processing enterprises for magnesium alloy also declined. The cut-throat competition in processing fee quotations intensified, but the high aluminum prices made the cost-effectiveness of magnesium alloy significantly stand out. End-use attention to magnesium alloy steadily increased, with some manufacturers operating at full capacity. The production decrease this month was due to the continued deterioration of end-use demand, making it difficult to follow up on magnesium alloy transactions. The cut-throat competition in processing fees made profitability challenging for manufacturers, forcing some to reduce their operating rates. The continuous low-level consolidation of raw material magnesium ingot prices led downstream enterprises to purchase as needed. The essential demand remains, but the recovery cycle for the magnesium alloy market is relatively long. SMM expects October magnesium alloy production to remain at 30,000 mt.
Aluminum Alloy Market Demand Situation:
According to SMM statistics, in September 2024 (30 days), domestic aluminum production increased by 1.45% YoY.
SMM statistics show that in September 2024 (30 days), overseas aluminum total production slightly decreased by 0.1% YoY. As of September 2024, cumulative overseas aluminum production increased by 1.1% YoY. The average overseas operating rate was 88%, slightly down by 0.2% MoM, up 0.7% YoY.
Russia: Total production in September increased by 2.9% YoY, with an average operating rate of 95.3%. The increase came from the restart of the Taishet aluminum smelter, which was announced in early 2022 but progressed slowly. In September, the plant's total production was about 21,000 mt, with the operating rate recovering to about 64%.
Europe (excluding Russia): Total production in September increased by 2.9% YoY, with an average operating rate of 73.8%. The increase mainly came from the resumption of production at Trimet's three plants in Germany. Trimet announced the resumption in April 2024, expecting full production by mid-2025. SMM estimates that the operating rate of the three plants recovered to about 63% in September.
Middle East: Total production in September slightly decreased by 1.5% YoY, with an average operating rate of 102.2%.
India: Total production in September was about 348,000 mt, up 0.7% YoY. The average operating rate was 100.2%.
Other Asian regions excluding China, India, and the Middle East: Total production in September decreased by 1.7% MoM, with an average operating rate of 76.3%, down 3.8 MoM. The decrease was due to an explosion at Press Metal's Samalaju plant in September, affecting about 9% of total aluminum capacity, specifically 100 out of 300 electrolytic cells in the plant's third phase. This incident is expected to reduce Press Metal's aluminum production by about 3% for 2024. The repair of the damaged facilities is expected to take about four months, after which production will gradually recover.
Next Month's Forecast:
According to SMM statistics, in October 2024 (31 days), overseas aluminum production is expected to remain flat YoY, with an average operating rate of 88%, slightly down by 0.2% MoM, up 0.7% YoY.
Magnesium Powder Market Demand Situation:
SMM data shows that in September 2024, China's magnesium powder production slightly increased MoM. October's magnesium powder production is expected to grow slightly, influenced by the quiet order situation and the fluctuating magnesium ingot prices, leading to a cautious sentiment among downstream enterprises. Some magnesium powder enterprises maintain low production levels. A representative from a large magnesium powder enterprise stated that due to the sluggish domestic economic situation, steel mills' profits are thin, and frequent changes in magnesium ingot prices make downstream procurement cautious. Considering that low-priced magnesium ingots might stimulate an increase in magnesium powder orders, SMM expects domestic magnesium powder production in October to remain at 8,000 mt.
Sponge Titanium Market Demand Situation:
SMM data shows that in July 2024, China's sponge titanium production slightly declined MoM. In September, due to market impacts, sponge titanium enterprises faced significant production pressure, with many reducing production, leading to an overall decrease in market production. The reduced demand in the downstream titanium market increased operational pressure on the sponge titanium industry, with new orders lacking momentum, rising inventory trends, and continued price weakening. By the end of September, prices had further declined by 2,000-3,000 yuan/mt compared to early in the month. Enterprises faced inverted production costs, market oversupply, and a short-term pessimistic outlook for the sponge titanium market. More manufacturers plan to reduce production in October, with sponge titanium production expected to continue declining.
![Producers Slightly Hold Prices Firm, Weak Demand Drags Magnesium Prices into Consolidation [SMM Spot Magnesium Ingot Express Report]](https://imgqn.smm.cn/usercenter/XUnxM20251217171723.jpeg)
