Hebei Messi Biology Co., Ltd. stated that the decapacity of the supply-side reform of the magnesium oxide industry has begun to bear fruit in the past two years. All the lagging existing production capacity has been shut down or closed. Last year, the total output and total sales were relatively balanced. The tight market supply was due to the low inventory of manufacturers.
In recent years, the global magnesium oxide market has generally been in a market situation of oversupply. Low prices have made it difficult for many manufacturers to obtain sufficient returns. Some manufacturers have shut down some factories and reduced production to cope with the weak market. It is in the context of the global magnesium oxide industry matching the market by reducing production rates and inventory.
With the improvement of the quality of magnesium oxide in my country and the change of business philosophy and business methods, my country’s share of magnesium oxide in the international market has increased year by year, and my country’s export volume in 2023 reached a record high. For my country’s magnesium oxide industry, 2024 is a key year for supply-side reform. After experiencing the upward period in 2023 when market prices gradually became reasonable, the industry must calmly face market changes.
During the upward period of magnesium oxide in 2023, what is striking is magnesium ore resources. There is a global shortage and prices have skyrocketed. Taking domestic magnesium ore as an example, the price increase is as high as more than 80%. Magnesium ore has become a booster for the rise in magnesium oxide prices. People believe that resources that can be used to produce magnesium oxide will be in short supply for a long time, and this booster will be more powerful. This view still supports the confidence of companies in the industry, and it has also become an important factor in people’s confusion about the market’s divergence from it.
In the past few years, global magnesium oxide turned around and entered a downward trend. To be precise, it was caused by serious overcapacity, and global magnesium oxide destocking began. Learning from history, we are facing the same problem in 2024. Decapacity, improving quality, producing differentiated products, and targeting high-end products in the international market are the key to maintaining the upward trend of my country’s magnesium oxide industry.