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Magnesium prices fluctuated rangebound at highs this week. As of the time of reporting, the mainstream quotations for 99.90% magnesium ingot in the main producing regions stood at RMB 17,300-17,400/mt today, up by RMB 100/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 RMB 17,400-17,500/mt. Later, as magnesium prices climbed to RMB 17,500, 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. Coupled with small magnesium plants selling in line with market conditions, the supply of low-priced goods gradually increased, and the center of magnesium prices gradually shifted downward.
According to SMM analysis, the continuous decline in inventory in the main producing regions 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 momentum for continuous price increases in magnesium is weak, and it is expected that magnesium prices will fluctuate rangebound in the short term.
