Supply and demand are at a standstill, with magnesium prices holding up well this week [SMM Weekly Magnesium Review]

This week, the magnesium ingot market has generally shown a fluctuating rangebound trend, involving multiple links such as dolomite, magnesium ingot, magnesium alloy, and magnesium powder.
Dolomite: Recently, dolomite prices have remained stable. Wutai, as the main production area, has maintained sufficient inventory. Producers in other regions are meeting market demand gaps through flexible restocking. Considering the overall supply-demand balance, dolomite prices are likely to continue their stable trend in the short term. Additionally, according to feedback from magnesium plant executives, freight rates have fallen to their lowest point in recent years. Except for the previous surge in freight rates caused by procurement waves triggered by the shutdown of dolomite producers, freight rates for dolomite arriving at plants in the Wutai area have recently declined, resulting in a reduction of approximately 10 yuan in the cost of dolomite arriving at plants.
Magnesium Ingot: As of the time of writing, the transaction price for 99.90% magnesium ingot in the main production areas is 16,200 yuan/mt, with an FOB quote of $2,250/mt. This week, the magnesium ingot market has continued its fluctuating rangebound pattern, with prices consistently fluctuating within the 16,200-16,300 yuan/mt range, showing clear characteristics of horizontal consolidation. On the supply side, there have been numerous reports of magnesium plant resumptions in the main production areas this week. According to SMM, two magnesium plants have produced magnesium ingots this week, and it is expected that another two magnesium plants will produce magnesium ingots next week, indicating an increasing trend in magnesium ingot supply. On the demand side, due to the approaching shipping period, foreign trade traders concentrated on purchasing magnesium ingots in the first half of this week. Coupled with just-in-time procurement from domestic trade clients, magnesium ingot prices showed an upward trend. However, as the procurement period passed, demand support weakened, and magnesium ingot prices once again showed a weak downward trend. Overall, the recent magnesium market has shown characteristics of gradually increasing supply and sporadic demand surges, which has kept magnesium prices fluctuating within a narrow range. With the subsequent gradual increase in magnesium ingot supply from magnesium plants, it may disrupt the original supply-demand balance, and magnesium ingot prices may show a weak downward trend. SMM will promptly follow up on the resumption and shutdown maintenance situations in the main production areas.

Magnesium Alloy: As of the time of writing, the quote for magnesium alloy is 17,900-18,000 yuan/mt, with an FOB quote of $2,520/mt. The supply side has slightly contracted due to production cuts by producers, while the demand side remains weak due to the overseas order lull period and the domestic die-casting off-season, resulting in a weak supply-demand situation in the market. As a result, alloy processing fees have shown a bottom consolidation trend. Currently, the price of magnesium alloy is significantly influenced by the price of its raw material, magnesium ingot. This week, the price of magnesium alloy has maintained a high-level fluctuating rangebound trend.

Magnesium Powder: As of the time of writing, the quote for magnesium powder is 17,650 yuan/mt, with an FOB quote of $2,440/mt. This week, the price of magnesium powder has followed the fluctuating rangebound trend of its raw material, magnesium ingot. Producers generally adopt a "produce based on sales" strategy, maintaining only a small amount of working inventory to meet immediate orders, resulting in a strong wait-and-see sentiment in the overall market. Although the decline in material prices has exerted certain transmission pressure on the market, the tug-of-war between sellers and buyers continues, with limited room for adjusting quoted prices. It is expected that the overall market will remain in the doldrums in the subsequent period.