Magnesium Production Declines 7.41% MoM as Plants Enter Maintenance Cycle, Output Expected to Further Contract

[SMM Weekly Magnesium Inventory Flash Report] This week, social inventory increased by 3.8% month-on-month, showing a slight inventory accumulation trend overall. Looking at different regions, inventories in Shaanxi, Shanxi, and Tianjin Port have all accumulated to varying degrees. In the Shaanxi region, speculative sentiment has strengthened, with some traders making small purchases at low prices and hoarding goods to wait and see the after-market. In the Shanxi region, the purchased goods of some traders have gradually flowed into warehouses. As for Tianjin Port, export orders have remained sluggish, and since the document submission deadline has not yet arrived, inventory reduction through export sales has been hindered, leading to inventory backlog. Overall, the digestion of circulating goods has been slow, and inventory pressure may persist.

[SMM Weekly Magnesium Inventory Flash Report] This week, manufacturers' inventory decreased slightly by 0.95% compared to the previous week, and the domestic social inventory of magnesium ingots also declined slightly. Multiple smelters in the main production areas have concentrated on shutdown for maintenance, and the contraction of overall market supply has supported inventory reduction; however, regional differentiation is significant. Only a few enterprises in Fugu have actively cleared inventory and shipped goods, driving continuous accumulation of factory inventory in the Shaanxi region; in contrast, magnesium enterprises in Ningxia have a strong willingness to ship goods, with a prominent decline in local manufacturers' inventory, forming a sharp contrast in inventory trends between the two regions.

[Operating Rate Significantly Falls, Producer Inventory Slightly Destocks, Circulation-End Inventory Continues to Accumulate] According to the survey, multiple primary magnesium smelters intensively entered a maintenance shutdown period this week, and the overall industry operating rate pulled back significantly. A magnesium plant in Shanxi completed commissioning and produced magnesium ingots last week, but the overall scale of production cuts in the industry far exceeded the contribution from new capacity, and total primary magnesium production maintained a downward trend. In this round, the enterprises under centralized maintenance in Shaanxi plan to resume production mostly in mid-to-late July, while some producers indicated that the resumption period would be flexibly adjusted according to magnesium prices. It is expected that China's primary magnesium output will continue to contract next week.