The magnesium ingot market is showing a downward trend this week. On Monday, magnesium prices were under pressure and lowered to 15700 yuan/ton including tax in cash exchange; Market prices continued to decline in the middle and later stages of the week. As of Friday, the mainstream magnesium ingot factories in Fugu area quoted a price including tax of 15500 yuan/ton in foreign exchange, a cumulative decrease of 400 yuan/ton compared to last Friday. Prices in other regional markets also followed suit and fell.
Market supply and demand analysis
1.Supply side: Recently, factories have been actively offering discounts and shipping in order to digest inventory. The current supply side market production remains stable, inventory pressure is evident, and supply is gradually accumulating. Some individual companies are unwilling to sell at low prices due to severe price losses, but unfortunately, the overall market transaction situation is average. This week, some factories have continuously offered discounts to seek orders, and the trend of price reduction has accelerated.
2. Demand side: Downstream customers and intermediaries have little enthusiasm for procurement, with only a small amount of essential replenishment. Despite the continuous decline in magnesium ingot prices this week, hitting new lows in recent years, the sluggish demand side market is difficult to reverse. Downstream customers' inquiries and purchases are mainly cautious.
The magnesium market closed in a slump in February, with a mostly bearish market sentiment. The current oversupply of magnesium ingots and the sustained significant decline in raw material prices, especially coal prices, after the year are important factors leading to the sustained decline in market prices. On one hand, there is relatively stable production on the supply side, while on the other hand, there is weak demand on the demand side, with no improvement in domestic and international demand, resulting in significant market pressure and continuous decline in magnesium ingot prices.
In summary, from the perspective of supply and demand, although supply side factories have a stable price mentality, inventory pressure still exists, and they have a strong willingness to negotiate and ship; If there is no significant improvement on the demand side, it will be difficult to form effective support for magnesium prices. It is expected that the magnesium ingot market will continue to operate weakly and consolidate next week, with prices fluctuating within a narrow range. Focus on the trend of factory production reduction and restriction in March, as well as the actual procurement follow-up situation downstream.
