Magnesium Inventories Decline as Smelters Shut Down for Maintenance, Regional Disparities Evident

[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 Production Flash Report] From July 3 to July 9, the weekly production of the national sample magnesium plants was 23,419 tons, with a weekly operating rate of 76.83%, down 7.41% month-on-month. According to the survey, this week, multiple primary magnesium smelting enterprises have entered the shutdown and maintenance cycle, and the overall operating rate of the industry has significantly declined. A magnesium plant in Shanxi completed production and produced magnesium ingots last week, but the overall production reduction scale of the industry far exceeded the contribution of new production capacity, and the total production of primary magnesium continued to decline. The planned resumption time of enterprises undergoing centralized maintenance in Shaanxi during this round is mostly concentrated in mid-to-late July, and some manufacturers said that the resumption node will be flexibly adjusted according to the magnesium price market, and it is expected that the domestic primary magnesium output will continue to contract next week.

[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.