Price trend
According to the monitoring of SunSirs Commodity Market Analysis System: the overall magnesium ingot market in Shaanxi Province fluctuated at a high level, and fell back at the end of the month along with the nonferrous metal sector. The average market price at the end of the month was 16,775 RMB/ton, and the average market price at the beginning of the month was 17,250 RMB/ton, with a monthly decline of 2.75%.
Analysis review
Market demand was sluggish during the "Golden September" shopping season. Despite magnesium mills' strong willingness to maintain prices, disagreements began to emerge on the supply side amidst the continued sluggish purchasing environment. Low-priced products frequently emerged in the retail market, making the 17,000 RMB/ton price barrier difficult to maintain. At the beginning of the month, a bearish market sentiment prevailed, leading to a significant acceleration in price pressure in downstream inquiries. Some mills proactively implemented price cuts to clear inventory. By mid-to-late month, rising prices for raw materials like coal, dolomite, and ferrosilicon led to a slight rebound in magnesium ingot prices. However, end-user demand remained weak, and even before the National Day and Mid-Autumn Festival, downstream stockpiling was slow. After a brief period of stalemate in the magnesium market, mainstream transaction prices remained stable but weaker.
Supply and Demand
On the supply side, as most magnesium mills resumed production in September and increased output, coupled with a significant recovery in magnesium market profits, magnesium mills that had previously suspended operations due to cost constraints gradually resumed operations, driving production growth. This led to a month-on-month increase in raw magnesium production in September. Due to the continued influence of previous market conditions, magnesium production remained at a low level in the first half of 2025, while the industry entered a long-term destocking phase. The combined impact of low production and low inventory pushed up magnesium prices and gradually restored production confidence at magnesium mills, ultimately allowing magnesium production from January to September 2025 to match the same level as the same period in 2024.
In September, the magnesium alloy market saw robust supply and demand. Surging demand in end-use sectors like two-wheeled electric vehicles and new energy vehicles significantly outpaced supply growth, creating a tight market situation where supply outstripped demand, driving processing fees upwards. Magnesium alloy production is expected to see a slight increase in October. As the high temperatures gradually receded, the operating rates of leading manufacturers were expected to steadily increase. Furthermore, the recent increase in alloy processing fees had effectively improved processing profit margins. Raw magnesium manufacturers in Shaanxi Province are expected to release new alloy production capacity in October. Consequently, alloy production is expected to continue its upward trend.
Raw Materials
Ferosilicon market prices experienced alternating ups and downs in September. Earlier this month, a new round of electricity price increases provided strong support for ferrosilicon production costs. Furthermore, increased market demand and relatively tight supply contributed to strong ferrosilicon prices.
Market outlook
As October began, magnesium smelters in several provinces, including Ningxia, Shaanxi, and Inner Mongolia, had announced plans to resume production. With these resumptions, magnesium market supply is expected to see a significant increase. This substantial increase in supply will undoubtedly put greater pressure on magnesium prices. Overall, the magnesium market's supply and demand landscape will once again shift to one of strong supply and relatively weak demand. Therefore, magnesium prices are expected to remain under significant pressure in October.
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