SMM Analysis on China November Magnesium Ingot Production and December Forecast

According to SMM data, China's magnesium ingot production in November 2024 decreased by 1.5% MoM. In November, smelting enterprises in the magnesium ingot market saw both increases and decreases in production. The reason for the decrease is: due to the combined effects of supply surplus and weak demand, magnesium ingot prices have been declining for nearly two months. As magnesium ingot prices broke through the break-even line for smelting enterprises, these enterprises were forced to reduce or halt production. The reasons for the increase are: firstly, smelting enterprises that had previously halted production for maintenance gradually resumed production, leading to an increase in magnesium ingot supply. Secondly, some manufacturers adjusted their daily production based on their orders and inventory levels.

At the beginning of December, magnesium ingot prices were still on a downward trend, with no clear signs of stabilization. However, as smelting enterprises in major production areas faced losses across the entire cycle, news of production cuts and halts became frequent. It has been confirmed that the production of magnesium ingots has been affected by 250 mt, with smelters gradually reducing or halting production. The current supply-demand pattern in the market is gradually beginning to reverse, but the production cuts and halts are mainly occurring in Shanxi, Shaanxi, Ningxia, and Xinjiang provinces, with only 120 mt in major production areas affected. Therefore, the impact on stabilizing magnesium prices is limited, and further news of production cuts and halts in major production areas is still awaited. Considering that ten smelting enterprises will reduce or halt production in December, it is expected that magnesium ingot production in December will be adjusted down to 70,000 mt.