Sluggish trading, magnesium ingot market stabilized at highs this week [SMM Magnesium Weekly Review]

Magnesium prices fluctuated rangebound at highs this week. As of press time, the mainstream quotations for 99.90% magnesium ingot in the main producing areas were in the range of 17,300-17,400 yuan/mt, up 100 yuan/mt from last Friday.

At the beginning of the week, the magnesium market continued the upward trend from the previous week. The low in-plant inventory of magnesium plants provided bottom support for magnesium prices. Downstream customers' just-in-time procurement pushed up prices, with magnesium prices rising to 17,400-17,500 yuan/mt. Later, as magnesium prices climbed to 17,500 yuan/mt, downstream customers' fear of high prices intensified, and their procurement attitude became more cautious. Trading in the magnesium market was sluggish. Mid-week, magnesium prices fluctuated rangebound at highs. Traders who had hoarded inventory began to sell at lower prices one after another, lowering downstream customers' psychological expectations. Additionally, small magnesium plants sold in line with market conditions, gradually increasing the supply of low-priced goods and gradually pulling down the center of magnesium prices.

According to SMM analysis, the continuous decline in inventory in the main producing areas has kept the magnesium ingot market in a tight balance in the short term. The low inventory level continues to provide bottom support for magnesium ingot prices, limiting their pullback space. However, under the market logic dominated by raw material prices, the price of magnesium alloy follows the same frequency and resonance as that of magnesium ingot. The high prices of magnesium alloy have made it difficult to close deals recently, leading to a reduction in demand in the magnesium market. The weak momentum for continuous price increases in magnesium suggests that magnesium prices are expected to fluctuate rangebound in the short term.