Magnesium Market Remains in Downward Trend for Nearly Two Months: When Will the Decline Stop Signal Appear? [SMM Analysis]

As winter quietly approaches, looking back at the recent performance of the magnesium market inevitably brings a sense of melancholy. Since the National Day holiday, domestic magnesium prices have officially entered a downward trend. As of the time of writing, the mainstream prices of 90 magnesium ingots in the main production areas were 16,000-16,200 yuan/mt, down 1,800 yuan/mt from the price on October 9, and down 4,150 yuan/mt from the beginning of the year, a drop of 20%. The profitability of the magnesium industry has been continuously compressed, and smelting enterprises in the main production areas are facing losses across the entire cycle system. After long-term pressure, the market urgently needs new vitality.

Currently, magnesium ingot prices are still in a downward trend, and the signal of a halt in the decline has not yet fully appeared. However, as smelting enterprises in the main production areas face losses across the entire cycle system, news of production cuts and suspensions is frequent. It has been confirmed that the production of magnesium ingots has been affected by 250 mt, with magnesium plants gradually reducing or suspending production. The supply-demand pattern in the market is gradually beginning to reverse, but the production cuts and suspensions are currently distributed in provinces such as Shanxi, Shaanxi, Ningxia, and Xinjiang, with the main production areas only seeing 120 mt affected. Therefore, the reduction in magnesium ingot production is difficult to immediately change the current supply surplus situation and to quickly boost market confidence. To achieve a halt in price declines, it is necessary to continue to monitor whether there will be further production reduction measures.