Magnesium Plant Maintenance Drags Weekly Output; Strong Supply and Weak Demand Sustain Inventory Buildup [SMM Magnesium Weekly Data]

Published: Jul 17, 2026 17:46

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[Magnesium Plant Maintenance Dragged Down Weekly Output, Supply Strong and Demand Weak with Continuous Inventory Buildup] This week, the magnesium ingot market in the main production areas retreated after a rapid rise. At the beginning of the week, maintenance positives supported prices, but high downstream inventories and fear of high prices suppressed transactions, with some producers offering discounts to sell, putting magnesium prices under pressure and causing them to weaken. Tianjin port FOB prices passively followed the decline in China’s EXW prices, as sluggish demand during the summer break outside China and elevated ocean freight rates suppressed deals. Dolomite prices were stable, providing limited cost support. Magnesium powder and magnesium alloy prices first declined and then stabilized, following the trend of magnesium ingot. Downstream sectors such as steel mill desulfurization, titanium sponge, and die-casting enterprises entered the off-season, with transactions remaining sluggish, leaving the oversupply pattern unchanged. In the short term, the magnesium market will continue to move sideways.

Production and Inventory Brief Review

1.1 Weekly Production

From July 10 to July 16, weekly production of sampled magnesium smelters nationwide was 22,729 mt, with a weekly operating rate of 74.57%, down 2.95% WoW. According to the survey, this week multiple primary magnesium smelters entered a centralized maintenance shutdown period, and the industry's overall operating rate continued to pull back. Since this week, some primary magnesium smelters began to resume production, but considering some smelters still had maintenance plans in late July, primary magnesium production is expected to hit bottom and stabilize.

1.2 Weekly Inventory

1. This week, producer inventory edged up 1.78% WoW; producer inventory at domestic magnesium smelters edged up 1.78% WoW. Supply side, multiple primary magnesium smelters in the main producing areas underwent centralized maintenance shutdowns, significantly reducing the industry's spot magnesium metal supply. Demand side, market procurement demand was also sluggish, pressured by both overseas summer holidays and the downstream die-casting industry off-season. As the digestion of industry output was under pressure, producer inventory still showed a rebound trend.

2. This week, social inventory grew 3.4% WoW, showing an overall inventory buildup trend. There were two main reasons. First, influenced by the news of magnesium ingot smelters' maintenance shutdowns in the main producing areas, some traders stocked up appropriately. However, both in and outside China markets were in the demand off-season, new orders were limited, and overall shipments were few except for some delivery needs. Second, ocean freight rates stayed high and exchange rate fluctuations compressed export profits. Downstream customers clearly pushed for lower prices, traders' willingness to sell was low, and cargo pick-up pace slowed down. Purchased magnesium ingots were mostly accumulated in warehouses in Shaanxi and Tianjin port. Overall, downstream demand digestion was insufficient, destocking pace was slow, and social inventory continued the buildup trend.

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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