Weak demand, magnesium ingot market continued to decline this week [SMM Magnesium Weekly Review]

Magnesium prices were in the doldrums this week. As of press time, the mainstream transaction prices of 99.90% magnesium ingot in the main producing areas were in the range of 17,000-17,100 yuan/mt, down 300 yuan/mt from last Friday.

In the first half of the week, market trading was sluggish, with some factories showing slight signs of inventory buildup. As magnesium plants had significantly reduced their inventory pressure through substantial destocking in the earlier period, some magnesium plants maintained a firm stance on refusing to budge on prices. Mid-week, as low-priced supplies gradually emerged, the center of magnesium prices gradually shifted downward. However, under the psychological influence of "rush to buy amid continuous price rise and hold back amid price downturn" in the market, this had little effect on promoting trading, and magnesium market trading remained lackluster. As magnesium prices gradually approached the downstream's psychological price level, inquiries increased significantly this Friday. Magnesium plants offered discounts to close deals, and the daily trading volume exceeded 2,000 mt.

On the downstream side, as magnesium prices hit bottom and remained stable this week, concerns about "whether magnesium prices will continue to decline in the future" made downstream buyers cautious in their procurement. Downstream buyers who were not in a hurry to fulfill orders had a strong wait-and-see sentiment. According to SMM, due to the slow decline in magnesium prices recently, foreign trade customers have gradually started taking orders, waiting for further price declines.

SMM analysis suggests that the current stalemate between supply and demand in the market is quite evident. Under the influence of weak downstream demand, further price reductions by magnesium plants have relatively limited effects on promoting magnesium ingot trading, and factories' intention to hold prices is obvious. Considering the heavy wait-and-see sentiment among downstream buyers in the short term and the influence of factories' price protection, it is expected that the magnesium market will maintain a weak and stable trend in the subsequent period. SMM will continue to monitor subsequent trading conditions.