According to SMM data, China's magnesium ingot production in July 2024 was 75,153 mt, up 4.7% MoM.
The production of magnesium ingots showed a slight upward trend in July. This month, there were both increases and decreases in production among smelters in the magnesium ingot market. The reasons for the decrease in magnesium ingot production in July are: firstly, the normal maintenance of magnesium ingot smelters during the summer, with a total of three magnesium ingot smelters undergoing maintenance, impacting production by less than 3,000 mt. Secondly, due to various factors such as overseas summer holidays and sluggish end-user demand, the operating rate of magnesium ingot customers remained low, leading to insufficient market transactions and continuous inventory buildup. Additionally, the market price of magnesium ingots was close to the breakeven point for various producers, with some even operating at a loss, prompting some producers to cut production to control the increasing inventory. The reasons for the increase in magnesium ingot production in July are: firstly, the resumption of production by magnesium ingot smelters that had undergone maintenance in May and June, leading to an increase in supply. Secondly, some producers adjusted their daily production based on their orders and inventory levels.
Recently, the overall magnesium ingot market in China has shown a stalemate between supply and demand. Due to sluggish downstream demand and the disproportionate risk to income in market operations, magnesium ingot trading companies have low stocking willingness, and the market lacks supportive factors. Industry insiders are generally bearish, resulting in insufficient momentum for magnesium ingot price increases. On the other hand, considering that the current magnesium ingot market price is close to the breakeven point for various plants, smelters are not willing to lower prices. It is expected that magnesium ingot prices will move rangebound in August. Some smelters will gradually shut down according to maintenance plans, and it is expected that the magnesium ingot output in August will stabilize at 75,000 mt.
