July 2024: Magnesium Alloy Ingot Prices Dip as Global Headwinds Impact Demand

Magnesium Alloy Ingot, a critical material for lightweighting solutions in various industries, have witnessed a price decline across the United States, Germany, and China in the first half of July 2024. Recent market reflects softening demand and the vulnerability of the commodity to economic uncertainties. While lower production costs of Magnesium Alloy Ingot may benefit manufacturers in the short term, sustained weak demand from key user industries like automotive and aerospace could pressure prices further. Prices of Magnesium Alloy Ingot in Germany saw a minor decrease of 0.49%, settling at USD 3013 per metric ton CFR Hamburg. China, a major hub for EV production, faces a price decrease of 0.6% to USD 3248 per metric ton FOB Tianjin.

The German automotive industry, a significant consumer of Magnesium Alloy Ingot for components like chassis and gearbox housings, faces uncertainty due to potential European Union tariffs of up to 38% on Chinese electric vehicles (EVs). This regulatory stance could disrupt supply chains and dampen demand for materials used in automotive manufacturing, including Magnesium Alloy Ingot. Furthermore, the German auto sector is grappling with lower growth forecasts for battery-electric vehicle (BEV) production due to weaker than anticipated demand. The aerospace industry, another major user of magnesium alloys for engine and transmission parts, is also experiencing challenges. Airbus, for instance, has adjusted its delivery targets amid strained engine supplies for its A320-family narrow-body jets. These factors have taken the prices of Magnesium Alloy Ingot downwards.

China faces a complex economic landscape, including a global recession and a real estate crisis, which has impacted various industries. Additionally, China's recent announcement of stringent export controls on aviation and aerospace equipment, citing national security concerns, is expected to affect the aerospace sector and has affected magnesium alloy market dynamics.

In the United States, Magnesium Alloy Ingot prices dipped marginally by 0.6% to USD 3,287 per metric ton CFR Houston. The U.S. manufacturing sector contracted for the third consecutive month in June, pressured by higher interest rates. The automotive industry experienced a nearly 7% decrease in sales volume in June compared to May. The aerospace sector, a significant consumer of Magnesium Alloy Ingot, is currently facing weak activity and material availability challenges, as reported by major players like GE Aerospace. The global price decline in Magnesium Alloy Ingot can be attributed to a combination of factors on both the supply and demand sides. Decreased production costs have allowed manufacturers to pass savings down the supply chain, contributing to lower market prices. However, this occurs against a backdrop of subdued demand across key industries.