SMM October 14 - Today, the ex-factory offer for magnesium ingots in the Fugu area was yuan 16,200-16,300/mt, down yuan 50/mt from the previous trading day; the FOB offer was $2,345/mt. The mainstream transaction price held steady at yuan 16,200/mt, with the daily average trading volume last week reaching around 1,500 mt.
The continued decline in magnesium prices after the holiday was mainly driven by three factors:
First, significant supply pressure emerged, with producer inventories surging 44% last week. Trading activity in major producing areas notably decreased, compounded by production resumptions at some enterprises, which further accelerated inventory accumulation.
Second, the export front-loading effect was pronounced. To avoid post-holiday customs clearance risks, traders concentrated their purchases and shipments during the low-price period in September. Exports for that month were expected to hit an annual high, leading to a noticeable weakening of external demand in October.
Third, market sentiment shifted, with the "rush to buy amid continuous price rise and hold back amid price downturn" mentality spreading. The price downturn intensified wait-and-see sentiment.
Although trading showed some recovery following yesterday's price adjustment, and producers entered a phased destocking cycle, the supply-demand structure has not yet fundamentally improved. Magnesium prices are expected to remain in the doldrums in the near term.
