According to the monitoring of the commodity market analysis system of Shengyi Society, the magnesium ingot market in Shaanxi Province has risen this month (1.1-1.16), with an average market price of 15800 yuan/ton at the beginning of the month and 16650 yuan/ton at the end of this week, an increase of 5.38%.
In mid January, the trend of magnesium prices showed an upward trend followed by a downward trend, with an overall fluctuating adjustment. The specific reasons mainly lie in three aspects: cost, demand, and inventory
The cost driven effect is evident
At the beginning of the year, magnesium prices fell to the cost critical point of some magnesium factories, causing some enterprises to fall into a loss making situation. However, as the prices of major raw materials such as ferrosilicon and coal tend to be relatively stable, the pressure on magnesium plants on the cost side has been alleviated, providing a certain degree of support for the rise in magnesium prices.
The trend of increasing demand is significant:
The magnesium alloy market presents a continuous upward demand pattern. By December 2025, the production of magnesium alloys will achieve a month on month growth of 7000 tons, and top enterprises will have full orders and are intensively scheduling production. This positive trend has effectively driven the increase in demand for raw magnesium. At the same time, the deepening of automobile lightweighting policies has become a powerful driving force for the widespread application of magnesium alloys in the fields of automobiles and two wheeled electric vehicles, making the expected release of potential demand for magnesium alloys increasingly strong. However, the purchasing side of traders still shows a cautious attitude, and customers have a low acceptance of high priced products. Their purchasing behavior is quite conservative, and they only follow up on sporadic purchases based on rigid demands. Due to a decrease in enthusiasm from downstream buyers, prices slightly decreased in the middle of the month.
Inventory dynamics:
In the early stages, inventory levels continued to operate at a low level, while at the same time, some magnesium factories chose to shut down due to operating losses, resulting in a significant reduction in the number of available sources in the market. The inventory structure has also been further optimized, such as the relatively concentrated inventory of large manufacturers in the Shenmu area of Fugu, Shaanxi, which together form a strong support for magnesium prices.
Sudden change in market sentiment direction:
After a rapid rise in prices, the bearish atmosphere in the market has become increasingly strong, and end buyers are adopting a cautious and wait-and-see attitude. The transaction price has been significantly lowered due to the impact of middlemen’s selling behavior.
comprehensive analysis
It is expected that magnesium prices will continue to fluctuate and decline, with the possibility of further decline. The main reason is that the pressure caused by inventory accumulation before the Spring Festival continues to increase, and downstream demand has basically stagnated. At the same time, manufacturers have increased the phenomenon of selling goods to alleviate financial pressure.
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