China Upgrades Marine Resource Utilization: From Seawater to Mineral Extraction, Focusing on Magnesium

[SMM Magnesium Weekly Inventory Brief] This week, social inventories decreased by 3.00% month-on-month, showing a regional divergence. In major production areas, inventory reduction was more pronounced due to the progress of long-term contract deliveries and production cuts by some manufacturers. Meanwhile, Tianjin Port experienced slight inventory accumulation as low-priced resources stimulated traders' stockpiling. Overall, the inventory reduction in production areas provided some bottom support for magnesium prices, but the port inventory accumulation reflects persistent export difficulties, with short-term supply-demand imbalances still awaiting resolution.

Since the start of June, the tug-of-war between sellers and buyers over magnesium prices has been intensifying. The EXW price of 99.90% magnesium ingot (Fugu, Shenmu) moved sideways around 16,300–16,400 yuan/mt, with the trading range narrowing significantly. The magnesium market was mired in a supply-demand stalemate, as end-users' acceptance of high magnesium prices declined markedly, while primary magnesium smelters held their bottom line supported by costs.

[SMM Magnesium Express]Recently, due to a combination of factors including rising fuel costs driven by geopolitical conflicts and reduced turnover efficiency caused by congestion in major European ports, shipping companies have tightened capacity and raised freight rates, leading to a significant surge in international shipping costs. According to SMM research, since late June, the freight cost for magnesium ingots shipped from Tianjin Port to Rotterdam, Netherlands, has reached approximately $130 per ton, up $20 from the beginning of the month, while the average freight cost for the India route has reached $110 per ton, up $10. SMM will continue to closely monitor freight trends and make timely adjustments.