SunSirs: Insufficient Demand, Magnesium Prices Fell (September 8-12)

Price trend

According to the SunSirs Commodity Market Analysis System, the magnesium ingot market in Shaanxi Province declined last week (September 8-12). The average price at the beginning of the week was 17,225 RMB/ton, and by the end of the week it was 17,050 RMB/ton, a decrease of 1.02%.

Last week, the price fell back to around 17,000 RMB/ton, almost returning to the level before the price increase in late July.

Analysis review

Supply and Demand

On the supply side, overall magnesium smelting capacity remained stable, showing a slight upward trend. However, inventories declined again. Magnesium smelters were generally experiencing a certain level of panic. Furthermore, some companies faced cash flow constraints in mid-month, leading some to sell small quantities at low prices. This, to a certain extent, triggered a short-term price decline in the market.

On the demand side, after the magnesium price fell, some downstream users began to purchase in batches when the price fell due to the need to replenish stocks and deliver orders, while those users who had no emergency replenishment plans remained cautious and waited and saw what was happening. At the same time, some factories were actively and orderly arranging shipments, and the total spot supply on the market was not sufficient.

Raw Materials

Coal prices were rising, while semi-coke prices remained relatively stable. Dolomite prices had seen a significant increase, and ferrosilicon prices are expected to rise significantly, leading to a significant increase in overall costs.

Market outlook

Last week, the magnesium market faced downward pressure and entered a period of correction and consolidation due to insufficient demand support. As September approached, magnesium production inventories were rapidly being depleted, while upstream supply may be reduced due to equipment maintenance, making further declines in magnesium prices more difficult. After the weekend's market adjustments, the magnesium market is expected to gradually stabilize.

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