Magnesium ingot market consolidates at a low level, and the effectiveness of capacity expansion remains to be seen [SMM Magnesium Morning Meeting Summary]

SMM July 4 Magnesium Morning Meeting Minutes:

Magnesium Raw Material

Prices

The ex-factory prices (excluding tax) for 1-3 grade dolomite (Wutai) were 78 yuan/mt, while 2-4 grade dolomite (Wutai) were 128 yuan/mt. In Shaanxi, the mainstream ex-factory price for 75 ferrosilicon was 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, dolomite production in Wutai remains suspended, though ample inventory ensures sufficient supply of high-quality dolomite. Yesterday, ferrosilicon futures fluctuated upward, with the most-traded contract fer2509 closing at 5,455 yuan, up 12 yuan MoM. In the spot market, weak off-season demand led to slower supply-demand dynamics, with mediocre trading activity. Short-term prices may remain stable.

Magnesium Ingot

Prices

Today, transaction prices for magnesium ingots in Fugu were 16,100-16,200 yuan/mt, unchanged from yesterday. China's FOB price held steady at $2,220-2,300/mt.

Supply and Demand

The magnesium ingot market continued to consolidate at low levels, with producers showing strong reluctance to budge on prices. Futures contract shipments remained active. As delivery deadlines approached, traders increased transaction frequency. Foreign trade feedback indicated rising inquiries, particularly for magnesium alloy products, but firm buyer resistance to prices limited actual orders. Overall trading volume stayed low, with buyers and sellers locked in price negotiations. The market is expected to remain producer-driven, likely maintaining weak but stable trends.

Magnesium Alloy

Prices

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

Supply and Demand

Major magnesium alloy producers have been expanding capacity, leading to rising supply. Intensified competition has squeezed alloy processing fees, leaving little negotiation room. Fees currently fluctuate at low levels. According to one producer, the off-season for die-casting has reduced magnesium alloy orders, likely prompting some plants to lower operating rates.

Magnesium Powder

Prices

Mainstream tax-inclusive ex-factory prices for 20-80 mesh Chinese magnesium powder were 17,400-17,600 yuan/mt, flat from the previous trading day. FOB prices stood at $2,370-2,450/mt.

Supply and demand

The magnesium powder market currently exhibits obvious characteristics of just-in-time procurement. Downstream suppliers generally maintain a cautious wait-and-see attitude, and their procurement pace is relatively restrained.