SMM Magnesium Morning Meeting Summary on July 8:
Magnesium Raw Materials
Prices
The ex-factory price (tax not included) of 1-3 grade dolomite (Wutai) is 78 yuan/mt, and that of 2-4 grade dolomite (Wutai) is 128 yuan/mt. The mainstream ex-factory price of 75 ferrosilicon in Shaanxi ranges from 5,600 to 5,700 yuan/mt.
Supply and Demand
Recently, dolomite prices have remained stable. According to SMM, dolomite inventory in Wutai is sufficient, and producers in other provinces are actively meeting the remaining demand for dolomite. It is expected that dolomite prices will remain stable in the future. Yesterday, the futures market for ferrosilicon saw volatile movements, with the most-traded ferrosilicon 2509 futures contract closing at 5,364, down 40 yuan from the previous trading day. In the spot market, there was a strong wait-and-see sentiment in the ferrosilicon market, with weak follow-through on high-priced transactions. It is expected that ferrosilicon prices will remain stable in the short term.
Magnesium Ingot
Prices
Today, the transaction price of magnesium ingot in Fugu ranges from 16,300 to 16,400 yuan/mt, up 150 yuan from the previous trading day. The China FOB price remains unchanged at 2,210-2,310 $/mt.
Supply and Demand
Yesterday, the magnesium market held up well. Affected by tight spot supply and rising costs, magnesium producers held back on sales. In the morning, magnesium producers generally quoted prices around 16,300 yuan/mt. Downstream customers had a strong wait-and-see sentiment, leading to a stalemate in the market. Subsequently, foreign trade customers who were in a hurry to fulfill orders gradually entered the market to purchase, and transactions at 16,300 yuan/mt were gradually carried out. Overall, yesterday's magnesium market transactions performed well. Considering the current tight spot supply of magnesium ingot, it is expected that magnesium ingot quotes will increase slightly in the future.
Magnesium Alloy
Prices
The mainstream tax-included ex-factory price of magnesium alloy in China ranges from 17,950 to 18,050 yuan/mt, and the mainstream FOB price of magnesium alloy in China ranges from 2,510 to 2,520 $/mt.
Supply and Demand
Recently, the processing fees for magnesium alloy have remained at a low level and consolidated. The price spread between magnesium and aluminum has been maintained for a long time (the price spread between magnesium and aluminum yesterday was 4,290 yuan/mt), and the profit margin of magnesium-aluminum alloys such as AZ91D has been at a low level for a long time. The negotiation space for magnesium alloy processing fees is limited. According to SMM, the discount range for processing fees in the magnesium alloy market has been reduced to 10 yuan. Overall, the price of magnesium alloy is significantly affected by the price of raw material magnesium ingot, and the price of magnesium alloy is on an upward trend.
Magnesium Powder
Prices
The mainstream tax-included ex-factory price of 20-80 mesh magnesium powder in China ranges from 17,600 to 17,800 yuan/mt, and the China FOB price ranges from 2,410 to 2,460 $/mt.
Supply and Demand
Magnesium powder quotes continue to rise, driven by the support of raw material costs and the strong reluctance of some producers to budge on prices. The current price rally is mainly driven by costs, but end-use demand is insufficient. If subsequent transactions continue to be weak, the upside room for prices may be limited.
