Shanghai Nonferrous Metals News
As of end-June, domestic magnesium smelters increased magnesium prices driven by rising coal and FeSi prices. Raising prices stimulated demand and increased short-term transactions, but amid an overall bleak market, growth is limited.
SMM analysts take the view that the impact of COVID-19 across the world during Q2 2020 has been weighing on domestic smelters, as more than 50% of China’s total magnesium ingot/products are exported. Domestic smelters began cutting production in late April, but there is still a glut of supply in the market. SMM data shows approximately 30 kt of magnesium ingot stock at Fugu Shaanxi smelters and about 3kt~6kt stock at Wenxi Shanxi traders. Mounting social inventory is putting magnesium prices under pressure in the short-term.