Price trend

According to monitoring data from SunSirs' commodity price analysis system: Last week (January 26-30), the magnesium ingot market in Shaanxi province rose. The average market price at the beginning of the week was 16,350 RMB/ton, and the average market price at the end of the week was 16,750 RMB/ton, an increase of 2.45%.

Since last week, affected by changes in market supply and demand and cost increases, the prices of related products have continued to rise. Looking at different regions, the market performance in Shaanxi province was somewhat unique. Some companies, due to their own sales strategies, have chosen not to provide public price quotes, while others have raised their prices to 17,000 RMB/ton. Furthermore, with the approaching Spring Festival, several companies in Shaanxi have explicitly stated that they will suspend shipments before the holiday due to holiday arrangements and inventory management considerations.

Market ananlysis

Supply side

Major magnesium production regions in China, such as Shaanxi province, were maintaining stable output, and overall supply capacity had not fluctuated significantly. Meanwhile, with the approaching Spring Festival, the amount of magnesium ingots available on the market was continuously decreasing, leading to tighter supply in the distribution channels. Against this backdrop, magnesium smelters, based on cost support and changes in the supply and demand pattern, had generally adopted a stable pricing strategy, maintaining firm external quotations, resulting in a strong resistance to price declines in the market.

Demand side:

Given that meteorological departments predict sustained snowfall in major magnesium-producing regions and the traditional peak consumption season of the Spring Festival was approaching, downstream industries, considering the potential disruption to logistics due to weather conditions and the rigid consumer demand during the holiday period, have gradually initiated their pre-holiday stocking plans. As the stocking period progresses, market purchasing activity has increased significantly, and the willingness of both buyers and sellers to trade has continuously strengthened, driving a steady recovery in overall transaction volumes.

Cost side:

Recently, due to various factors including changes in market supply and demand and fluctuations in international energy prices, coal prices have continued to rise. This change has directly led to a significant increase in production costs for industries that rely on coal as their primary energy source or raw material. Meanwhile, the market prices of key raw materials such as semi-coke, ferrosilicon, and dolomite have remained relatively stable, without significant adjustments in response to coal price fluctuations. This has created a relatively stable component in the cost structure, effectively buffering some of the cost pressure caused by rising coal prices.

Market outlook

Recently, magnesium prices have shown significant fluctuations, but the overall trend was positive. With the approaching Chinese New Year, downstream customers were gradually releasing their stockpiling orders. At the same time, the long-term demand for magnesium alloys in downstream applications was also expanding rapidly. Therefore, it is expected that the market will continue its stable and upward trend before the Chinese New Year.

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