Production Rebound and Inventory Divergence Low Prices Promote Purchasing but Overall Pressure [SMM Weekly Data]

Published: Aug 28, 2025 15:48

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[Weekly SMM Data: Production Rebounds, Inventory Diverges; Low Prices Prompt Purchases but Overall Pressure Remains] This week, the weekly production of a national sample of magnesium plants reached 17,416 mt, with an operating rate of 57%, up 3.3% MoM. The production site inventory increased by 6.5% MoM, mainly due to sluggish transactions in the first half of the week caused by bearish market sentiment. Although subsequent price protection policies stimulated some purchases, overall inventory still showed an accumulation trend. Social inventory slightly rose by 0.61%, but monthly inventory decreased by 4.98% MoM. Traders maintained stable inventory levels after completing deliveries and taking advantage of low prices for restocking, coupled with concentrated foreign trade deliveries in August, leading to a continued destocking trend in social inventory.

Weekly production

From August 23 to August 29, the weekly production of national sample magnesium plants was 18,076 mt, with a weekly operating rate of 59.3%, up 3.8% WoW.

Weekly inventory

This week, the production site inventory increased by 9.9% WoW. Downstream procurement slowed down due to the "rush to buy amid continuous price rise and hold back amid price downturn" sentiment. Coupled with the demand gap period where old orders have been completed and new delivery dates are still far off, market transactions were sluggish, and producer inventories continued to accumulate.

This week, social inventory slightly increased by 0.61%, while monthly inventory decreased by 4.98% MoM. On one hand, some traders' inventories decreased after completing month-end deliveries; on the other hand, with magnesium prices hitting bottom recently, traders actively stockpiled and fulfilled previous orders, leading to an overall flat inventory for the week. In August, foreign trade orders were still in the concentrated delivery phase, resulting in an overall downward trend in inventory levels.

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM‘s internal database model. They are for reference only and do not constitute decision-making recommendations.

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