Bojun Technology and Guozhu New Materials Jointly Invest 15M in Semi-Solid Magnesium Alloys Venture

【SMM Weekly Magnesium Output Express】From October 9 to October 15, the weekly output of national sample magnesium plants reached 22,176 tons, with a weekly operating rate of 72.76%, a month-on-month decline of 0.88%. According to research, a total of two primary magnesium smelting enterprises suspended production for maintenance and one primary magnesium smelting enterprise reduced output during the National Day holiday. However, the reduction brought by the current magnesium plants has been offset by the increment from other magnesium plants that increased output. The overall production reduction of magnesium plants is negligible, which is insufficient to alleviate the current pattern of oversupply. According to SMM, a number of primary magnesium smelting enterprises in major producing regions currently have maintenance plans again due to the inversion of cost and price, and the subsequent primary magnesium output is expected to decline.

【SMM Weekly Magnesium Cost Briefing】From October 10 to October 16, the average production cost of magnesium ingots in Shaanxi province stood at 15,679 yuan/ton, up by around 1.73% week on week. In terms of profits, the industry posted an average loss of 379 yuan/ton this week, with the negative margin between magnesium price and production cost widening markedly. The underlying reasons are as follows: For one thing, the one-sided decline and sharp slump of magnesium prices after the holiday directly erased the remaining profit margins, pushing manufacturers deeper into negative profits. For another, the cost side also exerted simultaneous pressure: the transaction average price of Hongliulin lump coal this week came in at 1,048.77 yuan/ton, an increase of 22.34 yuan/ton from the previous period, while the price of semi-coke remained largely stable. The price hike of lump coal failed to be effectively passed through, exacerbating losses for semi-coke producers and further driving up the cost of magnesium ingots. In the short term, under the dual squeeze of persistently weak magnesium prices and high raw material costs, there remains a lack of support for magnesium plants to restore profits, and the current inverted price-cost situation is likely to persist.

【SMM Magnesium Flash】On October 16th, Latrobe Magnesium announced its latest progress, stating that the installation progress of Phase 1B of its demonstration plant in Victoria has reached 95%, with 35% of the commissioning completed. The company remains committed to its goal of producing the first batch of magnesium metal with a purity exceeding 98% by the end of 2026. Simultaneously, the company is advancing its plan to build a 50,000-ton magnesium plant in South Carolina, USA, and has secured a total of 32,000 tons/year of non-binding intention to purchase. As of the end of September, the company held AUD 3.4 million in cash and is currently undergoing a fully underwritten share placement financing of AUD 3.4 million, with the deadline for share placement extended from October 19th to October 26th. As the commissioning of the demonstration line progresses, the industrialization verification process of its low-carbon magnesium extraction technology is expected to accelerate further.