In July 2026, magnesium prices fluctuated within a narrow band of RMB 15,650‑16,000/ton, with the monthly average price at RMB 15,835/ton, down 2.55% month‑on‑month.
Entering July, magnesium price volatility kept shrinking, leaving the market trapped in a seesaw stalemate between upward and downward pressures. At end‑June, magnesium ingot prices slid below RMB 16,000/ton, severely squeezing profit margins for primary magnesium smelters. Burdened by cost pressures, multiple primary magnesium smelters in Shaanxi, the core producing region, launched maintenance and cut operating loads. According to SMM survey data, 18 magnesium plants in Shaanxi implemented output cuts in July. Primary magnesium output is estimated to fall 22.81% month‑on‑month. Supply contracted notably, easing the build‑up of manufacturer inventories. Nevertheless, such positive factors were offset by overseas summer shutdowns and shrinking domestic alloy demand. The July magnesium market featured weak supply alongside weak demand, keeping prices range‑bound. How will the magnesium market evolve under current conditions, and what price trend lies ahead for August?
Shaanxi’s primary magnesium output is projected to drop by nearly 15,800 tons month‑on‑month in July, representing a 22.81% month‑on‑month decline. This round of magnesium plant output adjustments registers the steepest production cut so far this year. For one thing, early‑year consensus anticipated a boom in magnesium alloy demand. Buoyant downstream demand coupled with speculative capital inflows fuelled rapid market demand growth. Yet subsequent magnesium alloy demand fell short of expectations. Newly‑released primary magnesium capacity from earlier capacity expansion created a supply‑demand mismatch. Smelters were squeezed by cost, inventory and capital pressures, forcing some to suspend production for maintenance. For another, high summer temperatures create harsh working conditions for certain positions; concentrated summer maintenance is also a regular seasonal practice across the magnesium sector.
Looking ahead to August, estimates point to a projected 14.13% month‑on‑month rise in Shaanxi primary magnesium output, signalling supply‑side recovery. Though several producers will stick to scheduled maintenance in August, incremental output from resumption of idled July capacity will outweigh losses from ongoing maintenance, lifting regional primary magnesium production moderately.
Market Outlook
The magnesium market is likely to stay in a weak‑supply‑weak‑demand scenario in early August. Operating rates remain low in the short run, while overall downstream demand stays sluggish, slowing inventory drawdown and capping upside for magnesium prices, which will trade in narrow ranges. By mid‑to‑late August, the market is expected to shift toward rising supply paired with rising demand. Foreign‑trade orders tend to see concentrated procurement, which may widen magnesium price fluctuation bands. Overall, future magnesium market performance hinges on the relative pace of supply restoration versus demand recovery.
