Magnesium ingot prices continue to rise, and the overall industry chain maintains a tight balance [SMM Magnesium Morning Meeting Summary]

SMM Magnesium Morning Meeting Notes on July 9:

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 is 5,600-5,700 yuan/mt.

Supply and Demand

Recently, dolomite prices have remained stable. According to SMM, dolomite inventory in Wutai is sufficient, and dolomite manufacturers 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 ferrosilicon futures market fluctuated, with the most-traded ferrosilicon 2509 futures contract closing at 5,350, down 24 yuan from the previous trading day. In the spot market, steel mills entered the tendering process at the beginning of the month, and just-in-time procurement increased (HBIS entered the tendering process for 2,700 mt of 75B ferrosilicon, up 500 mt from the previous month). Speculative demand showed a mediocre performance, and ferrosilicon prices remained stable in the short term.

Magnesium Ingot

Prices

Today, the transaction price of magnesium ingot in Fugu is 16,300-16,400 yuan/mt, up 100 yuan from yesterday. The China FOB price is reported at 2,250-2,330 US dollars/mt, up 20 US dollars from yesterday.

Supply and Demand

Currently, the domestic magnesium ingot supply remains tight. Manufacturers in major production areas such as Fugu continue to have low inventory levels. Some enterprises have limited production releases due to raw material and cost pressures. In overseas markets, although China's magnesium ingot export quotes have increased with the domestic market, actual transactions remain cautious. The lowest FOB transaction price remains at 2,250 US dollars/mt, reflecting limited buyer acceptance of high prices. Despite a short-term increase in trading volume driven by traders' restocking, there is still no significant increase in overall supply. Coupled with insufficient demand support during the traditional off-season in July and August, supply may continue to be in a tight balance in the future. If prices remain high, attention should be paid to the supplementary role of production resumptions and imported magnesium ingot in supply in the later stage.

Magnesium Alloy

Prices

The mainstream tax-included ex-factory price of magnesium alloy in China is 17,950-18,050 yuan/mt, and the mainstream FOB price of magnesium alloy in China is 2,510-2,520 US dollars/mt.

Supply and Demand

Recently, magnesium alloy processing fees have remained low and stable, and the magnesium-aluminum price spread has been maintained for a long time (the magnesium-aluminum price spread was 4,250 yuan/mt yesterday). The profit margin of magnesium-aluminum alloys such as AZ91D has remained low for a long time, and there is limited room for negotiation on magnesium alloy processing fees. Overall, on the supply side, some magnesium alloy manufacturers have reduced their operating rates. On the demand side, the centralized delivery of overseas orders in the early stage has led to a temporary lull in overseas demand, and domestic demand has weakened due to the off-season in die-casting. The subsequent magnesium alloy market will show a weak supply and demand situation. However, magnesium alloy prices are significantly affected by the price of raw material magnesium ingot. It is expected that magnesium alloy prices will remain stable at highs in the short term.

Magnesium powder

Price

The mainstream tax-included ex-factory prices of 20-80 mesh magnesium powder in the Chinese market range from 17,600 to 17,800 yuan/mt; the Chinese FOB price ranges from $2,420 to $2,460/mt.

Supply and demand

Recently, the demand for magnesium powder has been strong, with robust demand driving active transactions in magnesium powder and manufacturers having sufficient orders. The high price of raw material magnesium ingot supports the cost of magnesium powder, and with tight supply, some enterprises have extended their order schedules. Prices may remain firm in the short term, with attention paid to the impact of high prices on procurement.