Price trend

According to the monitoring of the commodity market analysis system of SunSirs, the magnesium ingot market in Shaanxi Province continued to rise last week (7.21-7.25), with an average market price of 16,425 RMB/ton at the beginning of the week and 17,225 RMB/ton at the end of the week, an increase of 4.87%.

The magnesium market showed strong upward momentum. At the beginning of the week, the quotation continued the level of previous weekend and started a moderate upward trend. In the middle of the week, the price jumped above 17,000 RMB/ton and continued to rise. As the weekend approached, the mainstream transaction price had steadily risen.

Analysis review

On the supply side, the spot circulation inventory in the magnesium production process had always been maintained at a low level. Due to tight order schedules, some companies had reluctantly suspended their quotations, and the scarcity of spot resources had become increasingly significant. At the same time, holders of low-priced goods in the market were generally reluctant to sell, which led to a strong sentiment, causing the market supply and demand situation to quickly shift from the previous loose situation to a tight state, further enhancing the driving force for price increases and driving prices to continue rising.

On the demand side, with the concentrated release of demand for magnesium in industries such as new energy vehicles and two wheeled electric vehicle components, the market demand scale was rapidly expanding. In addition, influenced by the prevalent consumer psychology of "buying up, not buying down" in the market, the purchasing enthusiasm of application end enterprises and traders had been fully ignited, thus forming a strong upward force on magnesium prices from the demand side, injecting momentum into the rise of magnesium prices.

On the raw material side, recently, coal, ferrosilicon, and other essential raw materials for magnesium smelting have seen their prices continue to rise. This trend has directly increased the cost burden of magnesium production, thereby building a stable bottom line for magnesium prices and becoming an important supporting factor in driving magnesium price increases.

Comprehensive analysis

Recently, the non-ferrous industry as a whole showed a significant upward trend, which had a certain driving effect on the magnesium market. However, as of this week, the core factors behind the rise in magnesium prices still lay in the weak supply and strong demand pattern presented at the supply and demand level, as well as the cost push brought about by the rise in raw material prices. Looking ahead to the future market, it is expected that magnesium prices will maintain a strong and stable trend in the short term.

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