SunSirs: Magnesium Prices Fluctuated Upward in July, Reaching a High at the End of the Month

Price trend

According to the monitoring of SunSirs’ Commodity Market Analysis System: the magnesium ingot market in Shaanxi Province overall fluctuated and rose. The average market price was 17,250 RMB/ton at the end of the month, and the average market price was 16,175 RMB/ton at the beginning of the month, with a monthly increase of 6.65%.

Analysis review

Starting in July, magnesium prices rebounded steadily, with a stalemate leading to a slight decline. In mid-month, the magnesium market saw a downward trend followed by a stabilization, with downward resistance to prices significantly increasing, halting the decline and stabilizing. By the end of the month, the magnesium market showed strong upward momentum, with quotations initiating a moderate upward trend that continued to climb, stabilizing at a high level near the end of the month.

On the supply and demand side

On the supply side, factories, due to their limited spot inventory, continued to maintain their willingness to maintain prices, making low-priced supplies extremely scarce in the market. Due to the extremely high temperatures, magnesium smelting companies were facing significant difficulties in resuming operations, and production costs had also increased to a certain extent. Holders of low-priced supplies were generally reluctant to sell, and this strong sentiment caused the market supply and demand situation to quickly shift from a previously loose situation to a tight one, further strengthening the upward momentum of prices and driving them upward.

On the demand side, while downstream demand showed some signs of improvement, purchasing remained cautious, with downstream customers and intermediaries primarily restocking small quantities based on rigid demand. While companies in the application sector showed a high degree of acceptance of current prices during the month, some trading companies, having secured orders at lower prices earlier, were more willing to lower their prices. With the concentrated demand for magnesium in industries such as new energy vehicles and two-wheeled electric vehicle components, market demand had rapidly expanded. Furthermore, driven by the prevailing market sentiment of "buy high, don't buy low," purchasing enthusiasm among application-side companies and traders had been ignited, creating a strong demand-side pull on magnesium prices and injecting momentum into the upward trend.

Raw Materials

The prices of coal, ferrosilicon, and other key raw materials essential for magnesium smelting continued to rise, providing a solid support base for magnesium prices and becoming a key factor driving the upward trend.

Future outlook:

As of July 31, the market was in a stalemate between supply and demand. Given the recent high magnesium prices, low-priced supplies were extremely scarce. Downstream buyers were cautious, and while inquiries were emerging, actual transaction volume remained low. A combination of factors, including rising raw material prices, shrinking supply, and reduced spot availability, had limited room for negotiation. Overall, magnesium prices are unlikely to rise or fall in the short term and are expected to remain stable.

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