In November, there was a supply and demand stalemate in the magnesium market, with weak operations being the main focus

On November 28, 2023, the cash and tax inclusive prices of magnesium ingots (99.9%, non acid washed, simple packaging) from various major production areas in China remained stable, with an overall range of 20600-20900 yuan/ton. Negotiations on actual orders were the main focus.



The specific price ranges for each region are as follows:


The ex factory foreign exchange including tax in Fugu area is 20600-20700 yuan/ton; Current exchange rate in Taiyuan area is 20700-20800 yuan/ton; The current exchange rate in Wenxi area is 20800-20900 yuan/ton; The current exchange rate in Ningxia is 20600-20700 yuan/ton.


Magnesium ingots are native magnesium ingots in accordance with the national standard (GB/T3499-2011); Non acid washing, no wooden pallets, and non payment acceptance price, actual order negotiation is the main focus.


Overview of the trend of magnesium metal in November


According to the Commodity Market Analysis System of Business Society, the average price in the domestic market on the 28th was 20900 yuan/ton, a decrease of 1.26% compared to the average market price of 21166.67 yuan/ton in early November (11.1); Compared to the beginning of the year (1.1), the average market price was 21700 yuan/ton, a decrease of 3.69%.


At the beginning of the month, magnesium market transactions improved and prices slightly increased. However, there has not been a significant improvement in the overall demand side performance, and the sustained upward momentum of magnesium prices is insufficient. After the increase, magnesium prices show relatively stable fluctuations.


The news of some magnesium factories resuming production in the main production areas in the middle of the month is fermenting, and the operators have insufficient information about the future market; Downstream demand is weak, and upstream raw material costs are supporting a decline. Under multiple negative factors, magnesium prices are under pressure and have fallen to below 21000 yuan/ton, with prices dropping to 20400 yuan/ton at their lowest point.


At the end of the month, there was an increase in low price inquiries in the market, and downstream users were significantly lowering prices. However, magnesium factories on the supply side showed a willingness to stop the decline and stabilize prices. Most manufacturers followed the market and adjusted their quotations according to their own situation.


In terms of supply and demand


This month, the supply and demand sides are in a stalemate game state, probing each other, and the market is flooded with news of some magnesium factories resuming production in the Fugu area. There is a possibility of further increase in production, and the confidence of manufacturers has been undermined. Downstream users have significantly lowered prices, and downstream demand for magnesium ingots has not followed up enough. Magnesium prices lack support for further price increases, and in the market pattern of oversupply, magnesium prices are mostly operating under pressure.


The recent significant appreciation of the RMB exchange rate has had a certain impact on the export of magnesium ingots. And this round of RMB/USD exchange rate recovery may not be over yet, which may affect the demand for stocking up before Christmas abroad.


Ferrosilicon experienced a cumulative decline of 1.83% in November


On November 28th, the quotation for ferrosilicon in Ningxia was between 6700-6900 yuan/ton, with an average market price of 6728.57 yuan/ton. The silicon iron market operated weakly in November, with prices continuously decreasing at the end of the month, steel bidding prices dropping, and downstream demand performing average. In the short term, the silicon iron market fluctuated weakly. The price of orchid charcoal remained stable in November, and currently the price of small Shenmu orchid charcoal is around 1180-1280 yuan/ton. The support for magnesium ingot prices on the raw material side has weakened.


Future Market Forecast

Overall, magnesium ingot prices were weak in November, and factories were more willing to raise prices at the end of the month due to cost support. But currently, the overall market lacks favorable factors, with weak demand and strong downstream wait-and-see sentiment. The appreciation of the RMB is not conducive to exports. The news of Fugu factory resuming production has led to an unstable industry mentality and bearish outlook on the future market. It is expected that the short-term magnesium ingot market will weaken, but the downward space will also be limited.

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