Suppliers are reluctant to sell due to strong sentiment, and magnesium prices bottom out and rebound [SMM Magnesium Weekly Review]

This week, the magnesium ingot market has generally shown a trend of fluctuating rangebound, involving multiple links such as dolomite, magnesium ingot, magnesium alloy, and magnesium powder.
Dolomite: Affected by the continuous maintenance and shutdown of a major dolomite manufacturer in the Wutai area earlier, the supply of high-quality dolomite in the magnesium ingot market has tightened. Manufacturers in other regions of Shanxi, Inner Mongolia, and Hubei have filled the supply gap, maintaining normal production in the magnesium ingot market. However, due to the replacement of raw materials, some magnesium ingot smelters have experienced a decrease in the stability of the quality of their produced magnesium ingots.
Magnesium Ingot: As of the time of writing, the transaction price of 99.90% magnesium ingot in the main production areas is 16,200 yuan/mt. After the previous downward adjustment, the recent trend of magnesium prices seems to have entered a "vicious cycle". Magnesium prices showed a weak downward trend on Monday and Tuesday. With downstream buyers gradually entering the market for procurement, magnesium prices bottomed out and rebounded on Wednesday and Thursday. On Friday, the magnesium market remained in a stalemate, adjusting, and this cycle has repeated for three weeks. The recent price trend of magnesium ingots mainly reflects two market characteristics: low spot inventory of magnesium ingots and low order-taking prices from traders due to weak demand. On the one hand, magnesium plants are producing magnesium ingots based on orders, and the tight spot resources provide a good foundation for a phased increase in the magnesium market. On the other hand, end-users are placing low-price orders, cutting off the possibility of a sustained increase in magnesium prices.

Magnesium Alloy: As of the time of writing, the quoted price of AZ91D magnesium alloy is 17,700-17,800 yuan/mt. Recently, the price of magnesium alloy has fluctuated in sync with the price of magnesium ingot, the raw material. Affected by the gradual release of capacity by magnesium alloy manufacturers, the alloy processing fees have remained stable after hitting bottom in the fourth quarter of last year. On the demand side, as the cost-effectiveness of magnesium alloy becomes increasingly prominent (with a price spread of 2,200 yuan/mt between magnesium and aluminum alloys), the application of magnesium alloy in the automotive field continues to expand. With the promotion of industry insiders, medium and large magnesium castings have been gradually launched in the market, showing an upward trend in demand for magnesium alloy. On the supply side, leading enterprises in the magnesium alloy industry have gradually released new capacity. In May, magnesium alloy production increased by 7.2% MoM. According to an SMM survey, it is expected that magnesium alloy production can remain stable in June.

Magnesium Powder: As of the time of writing, the quoted price of magnesium powder (20-80 mesh) from mainstream enterprises is 17,400-17,600 yuan/mt. Recently, the price of magnesium powder has shown a trend of fluctuating rangebound. Affected by the weakened demand from domestic steel mills, domestic orders for magnesium powder have shown mediocre performance. With the gradual delivery of overseas orders from earlier periods, overseas demand has also weakened. Overall, the supply and demand sides have shown weak performance recently, with mediocre market transactions and a cautious market atmosphere.