China Magnesium ingot output Up in February, Forecast for March

[Cost-Inventory Game, Market Consolidating to Find Bottom] This week, dolomite prices remained stable. Magnesium ingot prices, affected by coal and ferrosilicon, fell first and then rebounded slightly, but high social inventory kept supply pressure in place. Foreign trade FOB prices followed the domestic decline, overseas demand fell short of expectations, the September-October peak season failed to materialize, traders stayed on the sidelines, and downside was limited. Magnesium powder fluctuated with magnesium ingot, with only rigid-demand small orders. Although magnesium alloy smelting saw production cuts, inventory piled up, die-casting operations were weak, orders were insufficient, and processing fees were under pressure. End-use demand showed no improvement, and the magnesium market is expected to maintain a fluctuating trend in search of a bottom in the short term.

【SMM Magnesium Flash】This week, the social inventory of magnesium ingots increased by 1.59% month-on-month, leading to an overall increase in inventory pressure. At the beginning of the week, a wave of concentrated replenishment of just-needed inventory appeared in the market, briefly driving spot transactions to pick up. However, the effect of boosting the market was fleeting and failed to persist. On the one hand, magnesium producers are firm in their attitude towards price support, which to some extent dampens the enthusiasm of downstream purchasing. On the other hand, the actual demand from end-users is weak, and the market lacks sustained purchasing momentum. There is no significant improvement in foreign trade, and current transactions rely heavily on the delivery of existing orders from earlier periods, with no new large orders to support. Meanwhile, due to recent weather conditions, port shipment schedules are tight and shipping costs remain high, which has hindered the delivery of foreign trade orders and significantly slowed down the pace of export inventory reduction. It is difficult for on-site purchasing sources to quickly be transmitted and digested downstream and overseas, resulting in continuous backlog of supply. Ultimately, this has led to a significant accumulation of social inventory, especially port inventory, this week.

[SMM survey: Magnesium alloys become core lightweight materials: Tianhao and Sinyuan ZM expand production in succession] Recently, the magnesium alloy lightweight materials sector has seen a series of industrial moves: Tianhao New Materials signed a strategic cooperation agreement with Haitian Zhisheng Metal, with an initial intent to purchase 9 magnesium alloy injection molding machines to deploy capacity in South China; Sinyuan ZM announced plans to invest no more than 280 million yuan to build a lightweight precision structural parts intelligent manufacturing project in Fenghua. Both moves reflect the continuously climbing application demand for magnesium alloys in the high-end manufacturing sector.