Weak Supply-Demand Pattern, Magnesium Market Fluctuated Downward Overall This Week [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 ex-factory prices remained stable overall. Supply side, affected by environmental protection checks, leading stone quarries in the Wutai area of Shanxi announced production suspension again on May 1, reducing the supply of high-quality dolomite in the market. However, dolomite from Hubei, Inner Mongolia, Henan and other regions promptly filled the supply gap, and spot supply of dolomite in the market remained sufficient. Demand side, primary magnesium smelters in Shanxi, Shaanxi and other regions maintained high operating rates, and market demand was robust. However, dolomite price fluctuations were relatively small, as most primary magnesium smelters maintained safety reserve inventory of three to six months, and market procurement was mainly just-in-time procurement for restocking. Overall, the current dolomite market supply was relatively tight, and dolomite prices are expected to remain stable.

1.2.1 Magnesium Ingot (Fugu, Shenmu - Main Production Area)

This week, magnesium prices were in the doldrums. As of press time, mainstream quotations for 99.90% magnesium ingot in the main production area were 16,300-16,400 yuan/mt, down 200 yuan/mt WoW.

This week, magnesium prices continued to weaken. Supply side, primary magnesium smelters maintained stable operations, spot supply in the market was ample, producers showed high enthusiasm for shipments, and competition in shipments within the industry intensified. Some producers proactively offered concessions to facilitate transactions, driving market transaction prices continuously lower. Demand side, wait-and-see sentiment was strong in the market. Downstream buyers, influenced by the mentality to rush to buy amid continuous price rise and hold back amid price downturn, slowed their procurement pace, maintaining only just-in-time procurement overall, with insufficient willingness for bulk purchases. At this stage, the pattern of strong supply and weak demand in the magnesium market was prominent, the market lacked strong positive support, and prices continued their gradual downward trend.

1.2.2 Magnesium Ingot (Tianjin Port - China FOB)

This week, China FOB prices were quoted at $2,350-2,410/mt, with an average price of $2,380/mt. Magnesium ingot foreign trade market quotations edged down slightly this week.

This week, affected by weakening magnesium ingot ex-factory prices, foreign trade quotations continued to decline, with prices fluctuating around $2,350/mt. Large orders were absent recently, traders' quotations tended to be on the lower side, and market transaction performance was mediocre. Foreign trade quotations overall followed factory prices downward.

1.3 Magnesium Powder

This week, the mainstream tax-inclusive ex-factory price of 20-80 mesh magnesium powder in China was 17,500-17,600 yuan/mt; China FOB price was $2,480-2,580/mt.

This week, the magnesium powder market was under pressure. Recently, the operating rate of magnesium powder smelters edged down, magnesium powder market supply edged down, and there were expectations of tightening spot supply in the later period. Demand side, downstream metallurgical desulfurization and other industries in China only maintained just-in-time procurement, export orders outside China lacked incremental growth, and overall demand stimulus was limited. Currently, the magnesium powder market was in a state of two-way tug-of-war between cost support and weak demand, downside room was relatively limited, and the short-term market is most likely to move sideways, with prices unlikely to see significant fluctuations.

1.4 Magnesium Alloy

This week, the mainstream tax-inclusive ex-factory price of magnesium alloy in China was 18,400-18,600 yuan/mt, and the mainstream FOB price of China's magnesium alloy was $2,690-2,770/mt.

This week, magnesium alloy prices were in the doldrums. Supply side, magnesium alloy smelters maintained stable operations, spot magnesium alloy supply was sufficient, and inventory at some magnesium alloy smelters accumulated slightly. Demand side, order conditions among magnesium alloy smelters varied significantly, which drove the price spread in magnesium alloy smelter quotations to continue widening. End-user side, NEV demand was released steadily, two-wheeled electric vehicle demand was weak, and overall magnesium alloy market demand support was lacking. Overall, the magnesium alloy market this week leaned toward oversupply, and magnesium alloy prices fluctuated in sync with magnesium ingot.

2 Weekly Summary

This week, China's magnesium industry chain was overall in the doldrums. Upstream, the dolomite market remained stable. In Shanxi production areas, some capacity was suspended due to environmental protection-related controls, and high-quality supply tightened, but supply from multiple regions quickly filled the gap, keeping overall supply sufficient. Combined with ample raw material reserves at primary magnesium enterprises, only just-in-time procurement was maintained, and dolomite prices remained stable. In the main production area, primary magnesium operations were stable, spot supply was sufficient, producers actively shipped, industry competition intensified, and some enterprises offered concessions to facilitate transactions, driving magnesium ingot prices into a continued gradual decline. Downstream end-users had strong wait-and-see sentiment, influenced by the mentality to rush to buy amid continuous price rise and hold back amid price downturn, mostly making just-in-time procurement with a lack of large orders. The market exhibited a pattern of strong supply and weak demand, foreign trade quotations were adjusted downward in sync, and overseas trading was sluggish. In deep processing, magnesium powder operating rates pulled back slightly, with expectations of tightening supply in the later period, but demand stimulus in and outside China was insufficient, and the market moved sideways. Magnesium alloy enterprises maintained stable operations, some inventory accumulated slightly, industry orders diverged, quotation price spreads continued to widen, downstream demand was uneven, NEV demand was released steadily, two-wheeler demand remained weak, overall demand support was soft, supply was relatively loose, and prices were in the doldrums in sync with magnesium ingot.