SMM March 19 News:
With the shift in the supply-demand relationship, magnesium prices have ushered in a belated spring market since mid-March! The production cuts due to maintenance of magnesium ingots have reached approximately 20%, providing support for magnesium prices on the supply side. The generally low inventory levels of magnesium enterprises have fueled downstream panic buying, boosting prices. Downstream demand for magnesium has remained relatively stable, and low-priced goods are hard to find in the market. After experiencing three consecutive price increases last week, magnesium prices paused briefly before continuing to rise. After returning to the 16,000 yuan/mt threshold, how long can this late spring market for magnesium prices last?
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Spot Market:
Reviewing the historical price trends of magnesium, it is not difficult to see that the average price of SMM magnesium ingot 9990 (Fugu, Shenmu) was reported at 16,000 yuan/mt on December 31, 2024. Since the beginning of 2025, it has been in a stable with a weak trend overall. However, entering late February, due to multiple factors such as the continuous decline in magnesium raw material prices and financial constraints of magnesium plants, magnesium prices were once under pressure and declined all the way. The spread of market panic sentiment further drove the average price of SMM magnesium ingot 9990 (Fugu, Shenmu) to a low of 15,050 yuan/mt. As downstream demand for magnesium gradually recovered and the supply-side production halts and maintenance deepened, magnesium ingot inventory generally fell to low levels, and magnesium prices began to bottom out, with market confidence gradually recovering.
According to SMM quotations, on March 19, the price of SMM magnesium ingot 9990 (Fugu, Shenmu) was reported at 15,850-15,950 yuan/mt, with an average price of 15,900 yuan/mt. This average price increased by 850 yuan/mt, or 5.65%, compared to the previous low of 15,050 yuan/mt on March 7. According to SMM, as the production cuts of magnesium plants reached approximately 20%, the continued tight spot supply in the future makes a short-term price correction unlikely. Additionally, the generally low inventory levels of magnesium enterprises have triggered downstream panic buying. Suppliers of high-grade magnesium ingots are unwilling to lower prices for sales, and low-priced goods are hard to find in the market. Many magnesium plants are implementing a one-order-one-price policy, with mainstream quotations from magnesium plants already rising to 15,900-16,000 yuan/mt.
Outlook
Considering that the short-term tight supply of magnesium ingot spot is unlikely to improve, its strong support for magnesium prices remains. Currently, magnesium producers exhibit a strong sentiment to stand firm on quotes, and market confidence is relatively optimistic. Driven by good downstream demand, magnesium prices are expected to remain strong in the short term. Future developments will need to focus on changes in both supply and demand, such as the pace of enterprise maintenance and resumption of production affecting the supply side, as well as changes in the restocking pace of downstream demand following the rise in magnesium prices.
Institutional Opinions
【Huaxi Securities: Production Cuts and Halts Drive Magnesium Prices Up】 Huaxi Securities stated in a research report on March 15: Long-term losses due to cost inversion and sustained losses have led many magnesium plants to conduct early maintenance and production cuts or halts as the weather warms in spring. Additionally, inventory levels are generally low, and market supply has significantly decreased, with magnesium plants showing a strong sentiment to stand firm on quotes. Downstream demand is currently generally stable.
【CITIC Securities: Multiple Downstream Drivers Such as Robotics Propel Magnesium Alloy Die-Casting to Take Off】 CITIC Securities research pointed out that based on China's abundant primary magnesium production, the continuous penetration of lightweight demand in downstream industries such as automobiles, robotics, and eVTOL, and the economic price range of magnesium alloys, China's magnesium alloy demand is expected to continue growing. The forming equipment and component sectors of magnesium alloys are expected to fully benefit from this round of sustained growth in magnesium alloy demand. Semi-solid magnesium alloy forming is expected to help leading companies in the industry open a second growth curve. In the automotive sector, semi-solid magnesium alloy forming equipment may develop towards ultra-large integrated forming in the future. The production explosion in industries such as robotics and eVTOL is also expected to significantly boost the demand for semi-solid magnesium alloy equipment. CITIC Securities is optimistic about investment opportunities for leading domestic compression molding enterprises and expects domestic magnesium alloy die-casting component companies to achieve simultaneous growth in volume and price.
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