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 ranged from 16,000 to 16,100 yuan/mt, down 1,000 yuan/mt from last Friday.
According to some magnesium plants in the main producing areas, the market quotes were severely polarized this week. Due to differences in plant scale, inventory, and financial conditions, large plants with strong bargaining power were not considering negotiating prices for shipments. Influenced by their own factors, some small and medium-sized plants were shipping at low prices in line with the market. On the downstream side, affected by the fluctuations in magnesium prices, a buyer indicated that the previous large-volume overseas procurement approach had been replaced with a small-volume, multi-batch procurement model. During the phase of downward adjustment in magnesium prices, downstream players generally held their orders and adopted a wait-and-see attitude. On the downstream side, as the news of magnesium plant production resumptions in the earlier period gradually materialized, coupled with the continuous and unobstructed decline in magnesium prices this week, the wait-and-see sentiment among downstream buyers intensified, and their procurement activities slowed down.
SMM analysis suggests that if downstream buyers enter the market in a concentrated manner in the future, and with the inventory of small and medium-sized magnesium plants still at a low level, supported by news of environmental protection rectifications, magnesium prices may change from their current weak trend. SMM will continue to monitor the subsequent destocking situation in the main producing areas.
