Magnesium Prices Stabilize and Rebound: Can the Magnesium Market Maintain Steady Growth? [SMM Analysis]

Due to the impact of news and downstream buyers making purchases at low prices, the confidence of magnesium producers has somewhat recovered. After nearly two weeks of continuous decline, as of the time of writing, the mainstream transaction prices of 90 magnesium ingots in the main production areas were 17,600 yuan/mt, an increase of 100 yuan/mt compared to the previous working day.

[Supply and Demand of Magnesium Ingots]

Apart from the smelters in Shaanxi and Inner Mongolia that are undergoing maintenance, magnesium ingot smelters have generally maintained normal production. Due to weak downstream demand, inventory on the supply side has continued to accumulate, which has caused the prices quoted by magnesium ingot smelters to continue to decline. However, with cost support, the room for further price concessions by magnesium producers is limited. Additionally, the impact of news and the approaching shipping schedule have led to an increase in just-in-time procurement, which has somewhat restored the sentiment of price support among producers. This has provided some support for market stabilization, leading to a slight increase in magnesium prices.

[Raw Materials for Magnesium Ingots]

As the expectation of production cuts in Ningxia gradually weakens, as of the time of writing, the price of 75 ferrosilicon natural lump in Shaanxi remains at 6,750 yuan/mt, unchanged from the beginning of the week. Ferrosilicon futures narrowly fluctuate. Given that it is currently the traditional off-season for demand, end-user steel manufacturers are reluctant to stock up due to increased losses, and market participants generally hold a cautious attitude. Additionally, considering the decline in the price of semi coke, it is expected that the ferrosilicon market will continue to operate at low levels. SMM believes that the current magnesium ingot market transactions are mediocre, and given that the supply side generally maintains normal production, the strong supply and weak demand pattern is difficult to improve. Furthermore, with the raw material market operating weakly, the cost side lacks support, and the overall atmosphere of the magnesium market is bearish. It is expected that the magnesium market will continue to operate weakly in the future. SMM will continue to monitor downstream demand and market transaction conditions.