Prices consolidate sideways, market awaits directional breakthrough [SMM Magnesium Morning Meeting Summary]

SMM Magnesium Morning Meeting Minutes on June 30:

Magnesium Raw Materials

Prices

The ex-factory price (excluding tax) of 1-3 grade dolomite (Wutai) is 78 yuan/mt, and the ex-factory price (excluding tax) of 2-4 grade dolomite (Wutai) is 128 yuan/mt. The mainstream ex-factory price of 75 ferrosilicon in Shaanxi is 5,600-5,700 yuan/mt.

Supply and Demand

Recently, with the confirmation of the news that downstream magnesium plants have gradually resumed production, the demand for dolomite in the market is expected to see significant growth. Considering the sufficient capacity in Shanxi Wenxi, Hubei, Inner Mongolia, and other regions, it is expected that the price of dolomite will remain stable in the subsequent period. Last Friday, the most-traded ferrosilicon futures contract 2509 closed at 5,370, and the price increased by 70 yuan MoM, with a MoM increase of 1.32%. In the spot market, driven by the futures market, the market sentiment for ferrosilicon has improved, and prices have risen slightly.

Magnesium Ingot

Prices

Today, the transaction price of magnesium ingot in Fugu area is 16,200 yuan/mt, unchanged from the previous working day. The China FOB price remains unchanged at 2,220-2,300 US dollars/mt.

Supply and Demand

Currently, the fluctuation range of magnesium prices continues to narrow, maintaining sideways movement within the 16,000-16,300 yuan/mt range for three consecutive weeks, showing obvious characteristics of horizontal consolidation. Production on the supply side remains stable, but the expectation of production resumptions in July poses potential pressure. On the demand side, domestic trade is stable, while foreign trade orders have stalled, and traders mostly purchase as needed. The market lacks support from new demand, maintaining an overall weak operation trend.

Magnesium Alloy

Prices

The mainstream tax-included ex-factory price of magnesium alloy in China is 17,700-17,900 yuan/mt, and the mainstream FOB price of magnesium alloy in China is 2,480-2,510 US dollars/mt.

Supply and Demand

Recently, leading enterprises in the magnesium alloy industry have gradually released new capacity, and magnesium alloy production has shown an upward trend. The cut-throat competition in magnesium alloy processing fees has intensified, and magnesium alloy processing fees have shown a bottom consolidation trend. Considering the relatively sluggish trading atmosphere in the current magnesium alloy market and the narrow range-bound movement of raw material magnesium ingot prices, it is expected that magnesium alloy prices will also show a narrow range-bound movement trend in the subsequent period.

Magnesium Powder

Prices

The mainstream tax-included ex-factory price of 20-80 mesh magnesium powder in China is 17,450-17,650 yuan/mt, and the China FOB price is 2,380-2,450 US dollars/mt.

Supply and Demand

Magnesium powder prices remain stable, with continued support from raw material costs. Domestic demand is mainly for just-in-time procurement, while overseas inquiries are sluggish, and the market has a strong wait-and-see atmosphere.