SunSirs: Weak Demand, Magnesium Prices Significantly Dropped (May 22-26)

Price trend

According to the monitoring of SunSirs, as of the 26th, the average market price of domestic magnesium ingot was 24,100 RMB/ton, a decrease of 6.71% on a weekly basis. The market price of magnesium ingots fell sharply this week and continued to weaken. Due to sluggish downstream demand, the quotation for magnesium prices continued to be lowered at the beginning of the week. As of Friday, some factories had already quoted 23,000 RMB/ton for transactions. But even though prices continued to decline, downstream procurement had not improved.

Analysis review

In terms of supply and demand

Recently, many factories in the Fugu area that need to be dismantled and rectified had ceased production, resulting in a reduction in production, which had led some manufacturers to be reluctant to sell out. Another group of manufacturers had passively lowered prices, and due to the psychological impact of "buying up instead of buying down", there were few orders in the market, and downstream customers and intermediaries were extremely cautious in their operations.

In terms of raw materials

The average market price of ferrosilicon in Ningxia region was 7,018.57 RMB/ton. Due to insufficient performance on the demand side, coupled with relatively high social inventory and imbalance between supply and demand, the price of ferrosilicon had slightly decreased. The semi-coke market was stable and weak, with some enterprises reducing prices by around 50 RMB/ton. The cost side support had decreased, and the price of magnesium ingots had fallen.

Market outlook

Overall, the magnesium ingot market lacked cost and demand side support, upstream ferrosilicon and semi-coke operated weakly, while downstream demand was weak and prices were significantly depressed. It is expected that the price of magnesium ingots may continue to be weaker in the short term.

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