Price trend

According to the monitoring of SunSirs Commodity Market Analysis System: Last week (August 25-29), the magnesium ingot market in Shaanxi Province declined. The average market price was 17,300 RMB/ton at the beginning of the week and 17,400 RMB/ton at the weekend, a decrease of 0.57%.

Analysis review

In the last week of August, the magnesium market showed a narrow consolidation trend due to insufficient demand follow-up and weak raw material market performance. Some factories, needing to recover funds, slightly reduced prices to win orders. 

Last week, driven by a slightly weakening market and buyers' preference for buying high and not buying low, downstream buyers adopted a cautious approach, focusing their purchases primarily on meeting rigid demand. Those not in a rush to restock their stocks opted to cautiously wait and see market developments.

Supply and Demand

On the supply side, magnesium smelters' overall inventory levels remained low, which meant they were not experiencing significant liquidity pressure. Given this backdrop, and given the generally positive outlook and optimism surrounding the upcoming September market, believing that market demand is expected to grow and prices have room to rise, these companies were adopting a more prudent sales strategy and were less inclined to proactively lower prices to boost sales.

On the demand side, influenced by the mentality of "buy when prices rise and don't buy when prices fall", the downstream market showed a certain wait-and-see attitude, resulting in a corresponding decrease in purchasing volume.

On the raw material side

The market price of coal saw a slight decline, while the price of semi-coke remained relatively stable. Ferrosilicon prices also remained stable, resulting in a slight reduction in overall costs.

Market outlook

Analyzing supply and demand, the market demand was weak and lacked strong support, so the magnesium market is expected to have little momentum for a rebound in the short term. However, given that factory spot inventories were generally low and rigid demand continued to provide some support to the magnesium market, further declines in magnesium prices are relatively unlikely. The magnesium market may experience a period of weak and stable consolidation next week.

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