Maintenance Drives Supply Convergence, Magnesium Market Inventory Diverges Weakly [SMM Magnesium Weekly Data]

Published: Sep 11, 2026 16:59 (GMT+8)

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[Maintenance Drives Supply Contraction, Magnesium Market Inventory Diverges with Weakness] This week, domestic primary magnesium enterprise operating rates pulled back, with multiple smelters initiating maintenance and production cuts. Short-term raw material supply contracted somewhat, and production is expected to remain at low levels going forward. Inventory showed clear divergence, with smelter plant inventory edging higher. Despite maintenance reducing output, suppliers in the market dumped goods at low prices, and procurement orders flowed more toward circulating social inventory, causing passive inventory buildup at plants. Social inventory shifted to destocking, as traders took advantage of market conditions to clear earlier low-priced stockpiles. Downstream buyers exhibited notable fear of high prices, with procurement limited to rigid demand and no concentrated stockpiling activity. The continuous release of low-priced supply weighed on prices, compounded by the market's rush to buy amid continuous price rise and hold back amid price downturn mentality, leaving magnesium prices under pressure in the short term.

Production and Inventory Briefing

1.1 Weekly Production

From September 4 to September 10, weekly production at sample magnesium plants nationwide stood at 22,385 mt, with a weekly operating rate of 73.44%, down 4.17% WoW. According to the survey, multiple primary magnesium enterprises announced maintenance this week due to rising raw material prices pushing up production costs. Among them, three primary magnesium smelters halted production for maintenance and two cut production, leading to a notable decline in magnesium ingot output. The current maintenance period at these plants is expected to last 10 to 20 days, and primary magnesium production is expected to consolidate at lows next week.

1.2 Weekly Inventory

1. This week, inventory at primary magnesium smelters nationwide rose 1.33% WoW. Smelters in major production areas halted production for maintenance this week, significantly easing supply pressure, yet magnesium ingot inventory still trended upward. The main reason is that magnesium prices surged sharply, driven by soaring coal prices, and primary magnesium smelters kept their quotes high. Meanwhile, suppliers dumped goods at low prices in the market, with transactions concentrated on drawing down social inventory, diverting already scarce procurement orders and causing a slight increase in magnesium ingot inventory.

2. This week, social inventory of magnesium ingot fell 3.2% WoW, showing a destocking trend. At the start of the week, domestic magnesium ingot prices continued to rise, and downstream clients and traders showed strong fear of high prices, with no large-scale proactive stockpiling and only rigid-demand transactions, leaving market trading subdued. With EXW prices for magnesium ingot rising while demand showed no real recovery, traders actively cleared out earlier low-priced stockpiles, shifting inventory from the previous buildup phase to destocking. The continuous release of low-priced supply weighed on magnesium prices, and combined with the "rush to buy amid continuous price rise and hold back amid price downturn" market mentality, prices remained under pressure.

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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