According to the monitoring of the commodity market analysis system of Shengyi Society, the magnesium ingot market in Shaanxi Province fell this week (4.20-4.24), with an average market price of 17050 yuan/ton at the beginning of the week and 16550 yuan/ton at the end of the week, a decrease of 2.93%.
The following analysis is based on fundamentals:
Supply and demand side
On the supply side, the production status of smelting enterprises in the current main production areas remains stable. The factory’s spot inventory is at a historically low level, leading to a general reluctance to sell among enterprises. Mainstream large smelting enterprises have reduced their inventory of spot goods, prioritizing the smooth delivery of previously signed long-term orders. Overall, there has been no concentrated selling phenomenon in the market.
On the demand side, the traditional off-season characteristics of consumption are further highlighted, and downstream demand in areas such as automobiles, aluminum alloys, and steel desulfurization continues to be weak. Terminal enterprises only maintain small orders for essential needs without centralized replenishment actions; The export market has not shown a significant recovery, and overseas orders have fallen short of expectations, making it impossible to hedge the domestic demand gap. Market transactions remain sluggish, and there is a strong sentiment of buying up rather than buying down.
Raw material end
The prices of raw materials such as ferrosilicon and blue charcoal remain stable but are weakening, providing weak support for magnesium prices. The price of Fugu 75 silicon iron has declined compared to the middle of the week, and the market is weak. Purchasing is limited according to demand, and demand follow-up is flat. Some enterprises have resumed production, putting pressure on the market. However, in some regions, spot prices are tight and production orders are placed. Raw material prices remain stable, and manufacturers have a low willingness to lower prices and ship, so they are more cautious. Futures open high and fall low, trading is cautious, long and short positions are deadlocked, and the short-term 75 silicon iron market may fluctuate within a range. The price of Fugu blue charcoal is temporarily stable, with upstream raw coal steadily supporting costs and a moderate increase in supply. Downstream procurement is cautious, resulting in a weak balance between supply and demand. Coupled with weak demand for ferrosilicon and other materials, the fundamentals are weak, and the short-term price of blue charcoal may continue to be weak.
integrated forecasting
Although there is a possibility of technical recovery after oversold in the short term, the rebound space is relatively limited in an environment where demand has not significantly rebounded and supply remains loose, and can only be seen as a weak pullback. At present, two key variables need to be focused on: firstly, whether the downstream will carry out centralized stocking actions before the May Day holiday; Secondly, whether the smelting enterprises in the main production areas will initiate production reduction and maintenance plans is the only core factor that can reverse the short-term decline. If there are no favorable factors, magnesium prices are likely to continue their downward trend.
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