Weak supply and demand, prices maintaining sideways movement [SMM Magnesium Morning Meeting Summary]

Published: Jul 2, 2025 09:19

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[SMM Magnesium Morning Meeting Summary: Weak Supply and Demand, Prices Maintain Sideways Movement] SMM reported on July 2 that magnesium product prices remained stable overall today: Fugu magnesium ingot at 16,200 yuan/mt (FOB $2,220-2,300), magnesium alloy at 17,700-17,900 yuan/mt (FOB $2,480-2,510), and magnesium powder at 17,450-17,650 yuan/mt (FOB $2,380-2,450). Raw material dolomite was priced at 78-128 yuan/mt, and ferrosilicon at 5,600-5,700 yuan/mt (futures fell by 120 yuan). The market maintained a weak balance between supply and demand. Production resumptions of high-quality magnesium ingot in Shaanxi may drive up demand for high-quality dolomite, but the European summer break is suppressing exports. The expansion of magnesium alloy capacity has intensified competition in processing fees, while magnesium powder continues to operate under a production-on-order model. Prices are expected to remain volatile in the short term, and it is recommended to monitor marginal changes in demand.

SMM Magnesium Morning Meeting Minutes on July 2:

Raw material

prices

for 1-3 grade dolomite (Wutai) ex-factory prices excluding tax stood at 78 yuan/mt, while 2-4 grade dolomite (Wutai) was priced at 128 yuan/mt. The mainstream ex-factory price for 75 ferrosilicon in Shaanxi ranged between 5,600-5,700 yuan/mt.

Supply and demand

Recently, a magnesium plant in Shaanxi resumed production, focusing primarily on high-quality magnesium ingots. This is expected to boost demand for premium dolomite. However, with dolomite production in Wutai still halted, supply of high-grade dolomite may tighten. Yesterday, ferrosilicon futures showed a fluctuating trend, with the most-traded contract fer2509 closing at 5,204 yuan, down 120 yuan MoM. In the spot market, prices for 72# ferrosilicon softened slightly, attracting downstream buyers. Transactions were active yesterday, but ferrosilicon prices are expected to remain in the doldrums.

Prices

Today, magnesium ingot transaction prices in Fugu held steady at 16,200 yuan/mt for the third consecutive working day. China's FOB prices remained unchanged at $2,220-2,300/mt.

Supply and demand

The magnesium market currently maintains a weak supply-demand balance. Supply remains stable as new capacity has not been fully released. Demand shows divergence: domestic fundamental demand provides support, while foreign traders mainly execute existing orders cautiously. European demand weakened significantly due to the summer break and economic downturn, leading to persistently sluggish overseas orders. Overall, lacking breakthrough drivers, the market may continue its fluctuating trend in the short term.

Magnesium alloy

prices

Mainstream tax-inclusive ex-factory prices for Chinese magnesium alloy ranged between 17,700-17,900 yuan/mt, with FOB prices at $2,480-2,510/mt.

Supply and demand

Recently, as major magnesium alloy producers expanded capacity, supply continued to increase, intensifying competition in processing fees which currently hover at low levels. According to one producer, entering the off-season for die-casting, magnesium alloy orders declined. With weak demand support ahead and rising inventory pressure, processing fees are expected to remain in the doldrums.

Magnesium powder

prices

Mainstream tax-inclusive ex-factory prices for 20-80 mesh Chinese magnesium powder stood at 17,450-17,650 yuan/mt, with FOB prices at $2,380-2,450/mt, unchanged from the previous trading day.

Supply and demand

quotations remained stable. Domestic market was dominated by just-in-time procurement, with producers being cautious about restocking. Inquiries cooled overseas due to summer break. Currently, producers are manufacturing based on orders, without building inventory, and only maintaining a small amount of working capital inventory. The market was in a wait-and-see mood, with sluggish trading.

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM‘s internal database model. They are for reference only and do not constitute decision-making recommendations.

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