Support from raw material costs weakens, magnesium prices continue to consolidate weakly [SMM Magnesium Morning Meeting Summary]

SMM Magnesium Morning Meeting Summary on July 15:

Magnesium Raw Materials

Prices

The ex-factory price (tax-exclusive) 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, the market price of dolomite has remained stable. In Wutai, the main producing area, inventory levels are sufficient. Producers in other regions are meeting market demand gaps through flexible restocking. Additionally, freight costs have fallen to their lowest levels in recent years, slightly reducing the cost of dolomite arriving at factories. Yesterday, the futures market for ferrosilicon saw a significant increase, with the most-traded ferrosilicon futures contract 2509 closing at 5,484, down 38 yuan MoM. In the spot market, HBIS set the tender price for 75B ferrosilicon in July at 5,600 yuan/mt, up 100 yuan/mt from the previous round. The spot market for ferrosilicon is tight, with market sentiment recovering and ferrosilicon prices remaining firm.

Magnesium Ingot

Prices

Today, the transaction price of magnesium ingot in Fugu is 16,200-16,300 yuan/mt, down 50 yuan from the previous working day. The China FOB price is reported at 2,250-2,310 US dollars/mt.

Supply and Demand

The current magnesium market shows a weak supply and demand situation. On the supply side, producer inventory in Fugu remains low. Although news of environmental protection inspections has temporarily disrupted the market, the actual impact on production has been limited, with overall supply remaining relatively stable. On the demand side, with the end of the concentrated delivery period, the purchasing pace of downstream magnesium powder and alloy factories has slowed down. Traders have a strong wait-and-see sentiment, and market transactions are weak. In the short term, there is no expectation of a significant contraction in supply, while end-use demand has not shown obvious recovery, providing insufficient support for magnesium prices to rise. If demand remains weak in the later period, coupled with the resumption of production by some producers, the market may continue to be in the doldrums, with prices fluctuating rangebound.

Magnesium Alloy

Prices

The mainstream tax-inclusive ex-factory price of magnesium alloy in China is 17,850-17,950 yuan/mt, and the mainstream FOB price of magnesium alloy in China is 2,510-2,530 US dollars/mt.

Supply and Demand

Domestic magnesium alloy prices have declined in tandem with the price of magnesium ingot, the raw material. On the supply side, market supply has slightly contracted due to production cuts by producers. On the demand side, overseas orders have entered a lull period, and the domestic die-casting industry has entered the off-season, with demand remaining weak. The current market shows a weak supply and demand situation, and it is expected that magnesium alloy prices will fluctuate rangebound in the short term.

Magnesium Powder

Prices

The mainstream tax-inclusive ex-factory price of 20-80 mesh magnesium powder in China is 17,500-17,700 yuan/mt, and the China FOB price is 2,400-2,460 US dollars/mt.

Supply and demand

The magnesium powder market has recently been generally stable with slight fall. In terms of supply, producers have maintained stable output, with overall inventory levels remaining low. In terms of demand, downstream users have shown insufficient purchase willingness, mostly replenishing inventory on a need-based basis, resulting in a sluggish trading atmosphere in the market.