SMM Analysis On China September Magnesium Ingot Production And October Forecast

According to SMM data, China's magnesium ingot production in September 2024 saw a slight increase MoM. This month, smelters in the magnesium ingot market experienced both production increases and decreases. The reasons for the decrease in magnesium ingot production this month include: first, regular maintenance during the summer by magnesium ingot smelters, with two smelters undergoing maintenance—one in Inner Mongolia and one in Shaanxi—affecting production by approximately 2,300 mt. Second, some companies faced reduced production due to traffic disruptions from road repairs and weak end-use demand, leading to two smelters reducing production and two halting production. The reasons for the increase in magnesium ingot production this month include: first, smelters that previously halted production for maintenance gradually resumed operations, increasing supply. Second, some manufacturers adjusted daily production based on their orders and inventory levels.

Recently, China's magnesium ingot market has shown a stalemate. Due to weak downstream demand and the disproportionate risk-to-reward ratio in market operations, magnesium ingot trading companies have low stocking intentions, and the market lacks supportive factors, leading to a bearish sentiment among industry insiders. Consequently, there is insufficient momentum for price increases. On the other hand, considering that current market prices are close to the breakeven point for many plants, smelters are reluctant to lower prices. It is expected that magnesium ingot prices will fluctuate rangebound in October. As previously maintained smelters gradually resume production, coupled with two smelters planning to restart in October, October magnesium ingot production is expected to increase to 76,000 mt.