SMM Analysis: China's Magnesium Exports Surpass Expectations, August Shipments Jump 7.8% MoM

[SMM Magnesium Weekly Review: Cost Push Drives Magnesium Prices Up, Weak Demand Limits Gains] This week, mainstream quotations for 99.90% magnesium ingot in major production areas stood at 16,050-16,150 yuan/mt, up 300 yuan/mt WoW, with FOB prices at $2,280-2,380/mt and an average of $2,330/mt. Magnesium ingot prices shot up during the week, driven by rising coal and ferrosilicon costs, coupled with some restocking at higher prices in foreign trade. However, the overall market remained characterized by strong supply and weak demand, with sluggish transactions at high prices and signs of a pullback emerging in the latter part of the week. Overseas demand has not shown any substantial recovery, with market activity dominated by tentative inquiries, limited actual order volumes, and evident buyer pressure for lower prices, keeping trading sluggish. Downstream magnesium powder and magnesium alloy prices followed the cost-driven increase in magnesium ingot, but end-use demand for magnesium powder remained weak, with some enterprises cutting production or suspending operations, exports constrained, and inventory levels rising. Spot inventory of magnesium alloy was ample, competition among peers was intense, and die-casting enterprises faced insufficient orders and declining operating rates, keeping processing fees under pressure. In the short term, cost support and weak demand are locked in a tug-of-war, and the upward momentum in magnesium prices is losing steam, with the market likely to return to consolidation. Going forward, close attention should be paid to the release of domestic and overseas orders.

[Cost support insufficient to offset weak demand; magnesium ingot market turns subdued under pressure] China's magnesium ingot transaction center moved toward 16,000 yuan/mt today, with FOB quotes holding steady at $2,280-2,380/mt. Affected by sluggish high-price deals and insufficient domestic and overseas demand follow-through, the market shifted from holding prices firm to subdued under pressure, and is likely to consolidate on a subdued note in the short term.

【SMM Magnesium Flash】This week, the social inventory of magnesium ingots increased by 2.19% month-on-month, showing a continuous pattern of accumulation. Under the support of costs, domestic magnesium ingot prices continued to rise this week. Driven by the mentality of "buying when prices rise and not buying when prices fall" and some demand for delivery documents, traders made a small amount of stockpiling and follow-up purchases. However, after the price surge, market transactions significantly weakened, and downstream fear of high prices gradually became prominent. Currently, there has been no substantial recovery in terminal demand at home and abroad. Some traders store purchased goods in port warehouses for delivery documents and to cope with market fluctuations, while most traders choose to remain on the sidelines. Even though there is strong support from the cost side and expectations of price increases in the market, the willingness to make new purchases remains limited. Multiple factors have jointly contributed to the slight accumulation of social inventory this week.