Raw material prices diverge, with magnesium ingots and downstream products in the doldrums [SMM Magnesium Morning Meeting Summary]

SMM Magnesium Morning Meeting Summary on June 18:

Magnesium Raw Materials

Prices

The ex-factory price (tax not included) for 20-80 mesh dolomite (Wutai) is 78 yuan/mt, and for 30-80 mesh dolomite (Wutai) is 128 yuan/mt. The mainstream ex-factory price for 75 ferrosilicon in Shaanxi ranges from 5,600 to 5,700 yuan/mt.

Supply and Demand

Recently, some dolomite mines in the Wutai region of Shanxi have remained suspended, while prices for dolomite ore in other Wutai areas have not seen significant adjustments, with prices holding steady. Yesterday, the ferrosilicon futures market displayed a volatile and pulling-back trend. The most-traded contract fluctuated at the opening and slightly pulled back towards the close. In the spot ferrosilicon market, the supply-strong and demand-weak pattern is unlikely to reverse in the short term, and ferrosilicon prices are expected to remain volatile.

Magnesium Ingot

Prices

Today, the transaction price for magnesium ingots in the Fugu region ranges from 15,900 to 16,000 yuan/mt, a decrease of 50 yuan from the previous working day. The China FOB price is reported at $2,200-2,280/mt.

Supply and Demand

With ex-factory prices in the Fugu region falling below 16,000 yuan/mt, producers, though aiming to stabilize prices, are constrained by weak demand. Although inventory levels are low, they remain sufficient. Additionally, production resumptions by some enterprises in July will bring new supply. The international FOB price spread is significant, with European summer breaks leading to reduced procurement. The Asian market, primarily driven by alloy demand, is experiencing significant price pressure. Overall, domestic rigid demand remains stable, but the reduction in global orders has intensified export competition. Coupled with the approaching summer break and expectations of production resumptions, the market is expected to remain in the doldrums amid the tug-of-war between supply and demand.

Magnesium Alloy

Prices

The mainstream tax-included ex-factory price for magnesium alloy in China ranges from 17,500 to 17,600 yuan/mt, and the mainstream FOB price for magnesium alloy in China is $2,450/mt.

Supply and Demand

With the continuous decline in the price of magnesium ingot raw materials, influenced by the sentiment of "rushing to buy amid continuous price rise and holding back amid price downturn," die-casting plants and 3C customers are adopting a wait-and-see attitude, entering the market to purchase on a need-by-need basis, resulting in lackluster transactions. Considering that the price of magnesium ingot raw materials is expected to continue declining in the short term, magnesium alloy prices are anticipated to follow the weak trend of magnesium ingot prices.

Magnesium Powder

Prices

The mainstream tax-included ex-factory price for 20-80 mesh magnesium powder in China ranges from 17,200 to 17,400 yuan/mt, and the mainstream FOB price for magnesium powder in China is $2,380-2,450/mt.

Supply and Demand

Magnesium powder production has increased due to the impact of raw material prices, with traders increasing their procurement volumes. However, due to recent price fluctuations, some foreign traders remain in a wait-and-see stance.