According to the monitoring of the commodity market analysis system of Shengyi Society, the magnesium ingot market in Shaanxi Province fell this week (2.24-2.28), with an average market price of 16083 yuan/ton at the beginning of the week and 15800 yuan/ton at the end of the week, a decrease of 1.76%.
This week’s market analysis
In the last week of this month, due to unfavorable factors such as the lack of significant improvement in demand and rapid decline in raw material prices, magnesium prices fell faster than expected.
The price of magnesium ingots continues to bottom out to 15700-15800 yuan/ton. Affected by the recent rapid decline in magnesium prices, downstream enterprises have started phased replenishment operations based on cost optimization considerations. The current price is approaching the cost red line of most factories, and some factories plan to shut down.
supply end
The overall supply of the factory remains stable. However, due to the sharp decline in coal prices, the blue charcoal market has suffered significant impacts. This change has led to serious losses for factories, and most factories have a strong willingness to raise prices, hoping to maintain price stability to reduce losses. Unfortunately, due to the significant weakening of downstream demand, factories have to adopt a price reduction strategy to promote shipments under the dual pressure of inventory pressure and capital flow demand.
The price of raw material ferrosilicon has temporarily remained stable.
demand side
Currently, downstream demand remains weak and there are no clear signs of recovery. Against the backdrop of continued weakness in magnesium prices, downstream companies generally adopted a wait-and-see attitude at the beginning of the week, with low purchasing intentions, further exacerbating the market’s cold atmosphere. However, with the continuous decline in magnesium prices, as the weekend approached, magnesium prices had reached the psychological bottom of downstream enterprises, which to some extent stimulated the growth of procurement demand and led to a rebound in market transactions. However, overall, downstream demand remains weak, and the supply-demand imbalance in the market remains prominent.
comprehensive analysis
The recovery of downstream demand has not yet formed a clear and stable expectation, and coal prices have not shown significant signs of rebound. Affected by this, factories are generally facing losses, serious inventory backlog problems, and a pessimistic attitude towards the future market. As the temperature gradually warms up and the seasonality of industrial production activities weakens, it is expected that multiple factories will choose to shut down for maintenance in early March to reduce losses and adjust production pace, which will lead to a significant reduction in the supply of coal and magnesium. With weakened supply, magnesium prices are expected to slightly rebound next week.
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