Magnesium Market Weakened with Pullback, Foreign Trade Bucked the Trend with Price Increases Due to Policy Impact [SMM Magnesium Weekly Review]

1 Market Review

1 Dolomite

This week, the ex-factory tax-exclusive price of 1-3 cm dolomite (Wutai) was 108 yuan/mt, flat WoW, and the ex-factory tax-exclusive price of 2-4 cm dolomite (Wutai) was 138 yuan/mt, flat WoW.

This week, China's dolomite market operated steadily. In terms of supply, the Wutai area remained in a production halt, with market supply mainly supplemented by stone factories in surrounding counties and districts, and overall supply was largely stable. Demand side, the operating rate of primary magnesium enterprises in major producing areas rebounded slightly, and smelters mostly restocked based on rigid demand, providing notable support for dolomite demand. Combined with the relatively strong fluctuations in international crude oil prices this week, transportation costs remained firm at a high level, and delivery-to-factory prices for dolomite are expected to remain stable in the short term.

1.2 Magnesium Ingot

1.2.1 Magnesium Ingot (Fugu, Shenmu - Major Producing Areas)

This week, magnesium prices retreated from highs. As of press time, mainstream quotations for 99.90% magnesium ingot in major producing areas were 17,000-17,150 yuan/mt, down 350 yuan/mt WoW.

This week, magnesium prices remained in the doldrums. The core driver of this round of price decline was the short-term supply-demand pattern imbalance. Current magnesium ingot quotations remained at a relatively high level, with downstream procurement follow-through lacking momentum. Combined with previously stockpiling traders collectively offloading at low prices, this triggered a price collapse in the market, with panic selling sentiment continuing to spread and driving magnesium prices to accelerate downward. Overall, this downturn was a phased rational pullback following the previous rally, rather than a trend reversal. At this stage, downstream buyers were influenced by the sentiment of rushing to buy amid continuous price rise and holding back amid price downturn, with procurement pace slowing down overall and strong wait-and-see sentiment. As magnesium prices gradually pull back to a range acceptable to downstream buyers, end-user purchase willingness is expected to gradually rebound in the second half of the week, market transactions will recover, and the decline in magnesium prices will gradually narrow.

1.2.2 Magnesium Ingot (Tianjin Port - China FOB)

This week, the China FOB price was quoted at $2,500-2,600/mt, with an average of $2,550/mt. At the beginning of this week, foreign trade quotations fluctuated downward, but reversed on Thursday with an increase of $50/mt.

This week, the magnesium ingot overseas trade market and domestic trade market showed a clear divergence in trends. According to SMM analysis, the main reason was that customs authorities had been continuously intensifying supervision over non-compliant exports and dual-use items recently, and the magnesium ingot foreign trade market had long been a concentrated area for violations such as forging or purchasing customs clearance documents from other import and export firms. The tightening of policy signals this time triggered a certain degree of panic sentiment in the foreign trade market, pushing quotations toward higher levels. However, from the perspective of actual demand, orders in the foreign trade market were generally weak, and combined with declining magnesium prices in major producing areas, the market remained amid weak adjustment sentiment. The subsequent trend of FOB quotations still requires close attention to the direction of changes in export policies.

1.3 Magnesium Powder

This week, the mainstream tax-inclusive ex-factory price of 20-80 mesh magnesium powder in China was 18,250-18,450 yuan/mt; the China FOB price was $2,660-2,760/mt.

This week, magnesium powder prices pulled back, mainly driven by the decline in raw material magnesium ingot quotations. Supply side, magnesium powder enterprises produced based on demand, with relatively stable orders in March and April, good production performance, and overall operating rates remaining stable. Demand side, steel mill demand in the domestic trade market recovered somewhat, while new orders in foreign trade saw limited growth, and enterprises mainly produced based on demand. Magnesium powder prices are expected to trend slightly downward in the short term, influenced by raw material fluctuations.

1.4 Magnesium Alloy

This week, the mainstream tax-inclusive ex-factory price of magnesium alloy in China was 19,200-19,400 yuan/mt, and the mainstream FOB price of China's magnesium alloy was $2,850-2,930/mt.

This week, the magnesium alloy market showed a divergent pattern with weak magnesium ingot benchmark prices and firm processing fees. Manufacturers maintained stable supply, with post-holiday orders narrowing compared to pre-Chinese New Year levels, and inventory at some enterprises gradually accumulated. Downstream die-casting enterprises, influenced by the sentiment of rushing to buy amid continuous price rise and holding back amid price downturn, mostly purchased based on rigid restocking needs, with an overall slower pace. Currently, the market supply-demand pattern showed strong supply and weak demand, with magnesium alloy prices largely stable supported by processing fees, and the overall trend moving in sync with magnesium ingots.

2 Weekly Summary

This week, the magnesium market was overall in the doldrums. Magnesium ingot quotations in major producing areas fell 350 yuan/mt WoW to 17,000-17,150 yuan/mt. Downstream procurement was dominated by strong wait-and-see sentiment, and panic selling drove prices to accelerate downward, with the market entering a phased rational pullback. On the foreign trade front, affected by intensified customs supervision over non-compliant exports and dual-use items, the FOB quotation reversed on Thursday with an increase of $50 to $2,500-2,600/mt, showing a clear divergence between domestic and overseas market trends. Magnesium powder and magnesium alloy prices pulled back along with raw materials, while processing fees remained largely stable, and the overall market showed strong supply and weak demand. Magnesium prices are expected to see a gradually narrowing decline in the short term, and subsequent attention should be paid to changes in export policies and downstream purchase willingness.