Supply Recovery Releases Shipments, Weak Demand Keeps Magnesium Market Consolidating on a Weak Note [SMM Magnesium Weekly Review]

1 Market Review

1 Dolomite

This week, the EXW price excluding tax of 1-3 cm dolomite (Wutai) was 128 yuan/mt, flat WoW, and the EXW price excluding tax of 2-4 cm dolomite (Wutai) was 158 yuan/mt, flat WoW.

This week, delivered prices of dolomite remained stable overall. Affected by the continued halt of production at major large dolomite mines in the Wutai region, local high-quality supplies were tight, forcing primary magnesium smelters to shift their procurement focus outward, sourcing from areas like Hebi in Henan, Datong in Shanxi, and Shiyan in Hubei. With continuous replenishment from multiple channels, overall market supply was ample, prices showed no significant fluctuations for now, maintaining a firm stance.

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

This week, magnesium prices were in the doldrums. As of press time, mainstream quotations for 99.90% magnesium ingot in main production areas were 15,750-15,850 yuan/mt, down 50 yuan/mt WoW.

This week, the magnesium ingot market saw intense tug-of-war between sellers and buyers, with prices exhibiting a slow, stepwise downward trend. Early in the week, upstream primary magnesium smelters still held back from selling, while downstream players mainly waited and watched due to fear of high prices. Amid a stalemate between the two sides, trading was sluggish, and inventory pressure for smelters continued to build in the first half of the week. Around mid-week, maintenance-hit plants gradually resumed production, easing spot supply. Combined with inventory buildup pressure, some smelters began to make proactive price concessions for sales promotion. However, supported by cost support, price concessions were generally restrained, and magnesium prices did not see a sharp drop but rather a step-by-step slow pullback.

1.2.2 Magnesium Ingot (Tianjin Port - China FOB)

This week, the China FOB price was quoted at $2,240-2,340/mt, averaging $2,290/mt. Magnesium ingot FOB prices were in the doldrums, down $10/mt WoW.

This week, the magnesium ingot foreign trade market was in the doldrums. Supply side, the Chinese market had ample supply and relatively high inventory, while downstream domestic buyers only made just-in-time procurement, with month-end concentrated restocking not yet showing clear signals. Costs formed a bottom support but were not smoothly transmitted downward, causing FOB prices in foreign trade to pull back $10/mt within the week along with domestic EXW prices, with the quotation range shifting lower overall. Demand side, overseas clients continued to mainly destock their own inventories. Although there was an increase in overseas inquiries, order growth was limited and price cuts were evident. Disrupted by multiple factors, including new export license regulations, exchange rates, and ocean freight rates, traders were also cautious in taking orders. Currently, the market lacked upward momentum, and in the short term, prices should consolidate on a weak note. As the summer break overseas gradually ends, the market may see a mild recovery.

1.3 Magnesium Powder

This week, the mainstream EXW price including tax of 20-80 mesh magnesium powder in China was 17,000-17,100 yuan/mt; the China FOB price was $2,400-2,500/mt.

This week, the transaction center of the magnesium powder market moved lower in step with magnesium ingot prices. Raw material side, magnesium ingot supply was ample, and magnesium powder processing fees remained under pressure. Desulfurization demand from domestic steel mills was still dominated by just-in-time procurement, and overall market trading was subdued. Export side, still affected by the overseas summer break and related export policies, export orders were somewhat suppressed. In the short term, the market is still hard to escape the constraints of the magnesium ingot market and is expected to consolidate on a weak note. Going forward, focus should be on the pace of overseas production resumptions and domestic steel mills' restocking.

1.4 Magnesium Alloy

This week, the mainstream EXW price including tax of magnesium alloy in China was 17,650-18,000 yuan/mt, and the mainstream FOB price was $2,565-2,645/mt.

The key feature of the magnesium alloy market this week was that processing fees remained under pressure amid weak supply and demand. On the price level, magnesium alloy consolidated on a strong note following upstream magnesium ingot, but this was more of a passive rise driven by the cost side, lacking fundamental support of its own. Supply side, although some producers halted operations for maintenance, the spot inventory accumulated earlier in the industry was still relatively ample, the market was well-supplied, and competition among peers was fierce. The drag from the demand side was more pronounced: downstream die-casting enterprises arranged production halts for maintenance due to high temperatures, with operating rates declining. Coupled with the two-wheeler industry's extensive substitution of plastic parts, the actual consumption of magnesium alloy was directly reduced. With both supply and demand weakening in tandem, the pressure on processing fees was significant.

2 Weekly Summary

Mainstream quotations for 99.90% magnesium ingot in main production areas were 15,750-15,850 yuan/mt this week, down 50 yuan/mt WoW, with FOB prices quoted at $2,240-2,340/mt, averaging $2,290/mt. Magnesium ingot prices trended downward in a stepwise manner during the week, as production resumptions from maintenance-hit plants increased supply, intensifying in-factory inventory pressure. Some producers sold at reduced margins, but the cost side limited the extent of the decline. Overseas inquiries in foreign trade increased somewhat, though clients still mainly destocked their own inventories, order growth was limited, and price cuts were evident. Combined with disruptions from new export regulations, exchange rates, and ocean freight, traders were cautious in taking orders. Upstream dolomite prices were flat, and with mines halted, enterprises sourced from multiple channels for replenishment, keeping overall supply ample. Downstream magnesium powder and magnesium alloy followed the weakness in magnesium ingot, with magnesium powder processing fees under pressure as steel mills only made just-in-time procurement; magnesium alloy spot inventory was ample and peer competition was fierce, while die-casting enterprises' high-temperature maintenance and plastic substitution in two-wheelers further suppressed demand, keeping processing fees under pressure. In the short term, cost support and weak demand are locked in a tug-of-war, keeping magnesium prices in the doldrums, awaiting order recovery after the overseas summer break ends.