Magnesium Output Declines 2.95% MoM as Plants Enter Maintenance Cycle

[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.

【SMM Weekly Magnesium Inventory Express】This week, producer inventories edged up 1.78% month-on-month. On the supply side, multiple primary magnesium smelters in major production regions have suspended production for centralized maintenance, leading to a notable reduction in the industry's spot supply of magnesium metal. On the demand side, constrained by both overseas summer holidays and the off-season of the downstream die-casting sector, market procurement demand has weakened in tandem, putting pressure on the digestion of industrial output. As a result, producer inventories continue to show a rising trend.

[SMM Weekly Magnesium Inventory Express] This week, the social inventory increased by 3.4% month-on-month, showing an overall inventory accumulation trend. There are two main reasons: First, affected by the news that magnesium ingot manufacturers in the main production areas have suspended production for maintenance, some traders have appropriately stocked up. However, both the domestic and overseas markets are in the off-season of demand, with limited new orders. Except for individual delivery needs, the overall shipment is relatively small. Second, the high sea freight coupled with exchange rate fluctuations has compressed export profits, and downstream price pressure is obvious. Traders' willingness to ship is low, and the pick-up rhythm has slowed down. Most of the purchased magnesium ingots are stored in warehouses in Shaanxi and Tianjin ports for accumulation. The overall downstream demand is insufficient to digest, the inventory destocking rhythm is slow, and the social inventory continues to accumulate.