According to the monitoring of the commodity market analysis system of Shengyi Society, the overall magnesium ingot market in Shaanxi region fluctuated at a low level, with an average market price of 16100 yuan/ton at the end of the month and 16325 yuan/ton at the beginning of the month, a monthly decline of 1.38%.
| Gamma-PGA (gamma polyglutamic acid) |
This month’s market analysis
During November, magnesium prices showed a narrow range of fluctuations and a relatively weak and stable trend overall. At the beginning of the month, magnesium prices fluctuated around 16200 yuan per ton; By mid month, driven by rising costs and improved trading volumes in some regions, prices had seen a slight increase; However, due to the lack of sustained demand follow-up, the price fell again, approaching the level of 16000 yuan per ton, and remained basically within this price range at the end of the month.
Supply and demand side
On the supply side, the current inventory situation in the main production areas continues to show a tight balance, with Fugu area performing particularly well. Most enterprises in this region have achieved zero inventory management, and low-priced goods are becoming increasingly scarce and difficult to find in the market. In this context, supply side enterprises have demonstrated strong willingness and ability to raise prices by leveraging their inventory advantages. At the same time, the process of capacity release has been steadily advancing without significant acceleration, and the contribution of newly added capacity to market supply is relatively limited. The overall market supply remains at a relatively stable level.
On the demand side, traditional demand areas have performed relatively poorly, and downstream enterprises mostly focus on digesting inventory, with procurement rhythm closely linked to price fluctuations, and there are few large-scale replenishment activities. The demand in emerging demand areas continues to be released, but the current order size is still relatively small, which has limited effect on driving up short-term prices.
In terms of raw materials
The price of thermal coal continues to rise, which in turn drives up the production cost of magnesium per ton. In this situation, the pressure of losses borne by enterprises has been alleviated, and the willingness to raise prices has become increasingly strong, which has become an important force supporting the bottom of magnesium prices. At the same time, the prices of raw materials such as blue charcoal and ferrosilicon remained stable, further consolidating the bottom line of costs.
Future forecast
From a short-term perspective, magnesium prices are expected to continue to fluctuate slightly around the cost line, lacking significant upward momentum. However, the magnitude of the decline will not be too large. At this time, it is necessary to focus on whether there are substantial signs of recovery on the demand side. Taking into account various factors, the magnesium price in November was affected and limited by both cost and demand factors, presenting an overall weak and stable trend. To break the current state of the market, we need to wait for substantial improvement on the demand side or structural adjustment on the supply side.
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