The escalating US-China trade war in which China is facing tariffs on its exports has taken a heavy toll on demand for magnesium powder from China, the world's largest magnesium powder exporter. The imposition of tariffs has increased the price for the US importers which resulted in taking away of competitive edge of Chinese magnesium powder in the US market. Also, several US customers sought for alternatives, which lowered the demand for magnesium powder and resulted in producing a surplus of supply in the international market. As Chinese manufacturers were compelled to cut prices in order to sell the surplus, unfolded as further decline in prices.

In addition to that the resumption of production post Chinese Lunar Year had an additional effect on the production and trading activities of magnesium powder. Throughout Chinese Golden Week, numerous Chinese factories closed for the holiday and resulted in a short-term decrease in production levels and postponed shipments. Upon resumption of operations the market was flooded with an excess of magnesium powder and contributed to further decline in prices. Furthermore, post-holiday period the magnesium powder market witnessed a sluggish demand as industries practiced cautious procurement policies.

ChemAnalyst analysed that this combination of post Lunar Year production, declining US demand and inventory overhang resulted in magnesium powder prices falling during February in the US market which mirrored the falling price trend in China for magnesium powder. This fall in magnesium powder price will likely continue through March also, as these issues remain a part of global market dynamics.

ChemAnalyst further anticipates that the magnesium powder prices will continue going southwards in March due to persistent soft demand from major sectors such as the pharmaceutical and nutraceuticals industries. With the ongoing uncertainties of US tariffs on China and seasonal impact on production post Chinese Lunar Year, the market for magnesium powder might not recover in the short term. Magnesium powder vendors are expected to continue revising their pricing strategy due to the unbalanced supply and demand in global markets.

It is recommended that procurer should benefit from the current lower prices of magnesium powder and stock it up at cheaper prices. They should be flexible to the market changes that might happen as global supply and demand dynamics evolve. It is also advised to keep track of China's production levels of magnesium powder. This will equip them to anticipate any further price fluctuations. On the other side it is recommended that sellers should evaluate their inventory levels and change their pricing strategy in its response. Sellers should also expand their client base to cushion the effects of reduced demand from conventional markets, like the US, where tariff-related issues will likely persist.