China's Magnesium Ingot Output in December Fell 11.5% amid Weaker-Than-Expected Downstream Demand

SHANGHAI, Jan 10 (SMM) - China's magnesium ingot output stood at 66,000 mt in December, down 11.5% month on month and 3.8% year on year. The output in 2022 totalled 950,000 mt, a year-on-year increase of 24.5%.

In December, the downstream market performance of magnesium ingots fell short of market expectations. This, coupled with high inventories, weighed down magnesium prices. Magnesium factories generally operated under pressure, and lacked enthusiasm in production. The overall domestic output of magnesium ingots thus declined sharply.

According to the factories in the main production areas, the drop in magnesium prices has severely squeezed the profits of magnesium factories, and some factories have suffered losses. The productivity was low. The total domestic output of magnesium ingots fell for the third consecutive month in December.

According to the production plans in the main producing areas, workers returning home for Chinese New Year holidays will result in a small decline in the output at some plants. It remains unknown whether demand will recover post-holiday due to the recent surge in COVID-19 cases.

The total output of magnesium ingots is expected to fall further to around 63,000 mt. SMM will continue to watch the changes in the main producing areas.