Magnesium prices hover at the bottom, with the tug-of-war between cost line support and weak demand continuing [SMM Magnesium Morning Meeting Summary]

SMM Magnesium Morning Meeting Summary on July 08:

Magnesium Raw Materials

Prices

The ex-factory price (tax not included) of 1-3 grade dolomite (Wutai) is 78 yuan/mt, and the ex-factory price (tax not included) of 2-4 grade dolomite (Wutai) is 128 yuan/mt. The mainstream ex-factory prices of 75 ferrosilicon in the Shaanxi market range from 5,600 to 5,700 yuan/mt.

Supply and Demand

Currently, the overall price trend of the dolomite market is stable. From the supply side, the inventory levels in the main production area of Wutai are sufficient, while producers in other regions are adopting dynamic restocking strategies to address local supply gaps. It is expected that dolomite prices will remain stable in the future. Yesterday, the ferrosilicon futures market experienced volatile movements, with the most-traded ferrosilicon futures contract 2509 closing at 5,482, up 0.55%. Today, driven by the general rise in ferrous metals series futures, the ferrosilicon futures market is holding up well. Coupled with the current tight spot supply in the futures market, there is strong support at the bottom of ferrosilicon prices. Considering the current short-term outlook, it is expected that ferrosilicon prices will remain stable.

Magnesium Ingot

Prices

Today, the transaction price of magnesium ingots in the Fugu area ranges from 16,200 to 16,300 yuan/mt, up 50 yuan from the previous working day. The China FOB price is reported at 2,240-2,300 US dollars/mt.

Supply and Demand

Today, the mainstream market quotation of magnesium ingot smelters is 16,300 yuan/mt, and the market spot transaction prices are concentrated in the range of 16,200-16,250 yuan/mt. Low-priced goods were only traded in small quantities in the morning and then disappeared. From the supply and demand perspective, the current price of magnesium ingots is approaching the cost line, and magnesium plants' willingness to sell at lower prices has weakened. Influenced by downstream enterprises' procurement and stockpiling, market transactions have steadily followed up. Magnesium ingot smelters' inventories have been effectively released, and their quotations have gradually become firm. The reluctance to budge on prices has increased, with fewer low-priced goods available, and magnesium prices have risen slightly.

Magnesium Alloy

Prices

The mainstream tax-included ex-factory prices of magnesium alloy in China range from 17,850 to 17,950 yuan/mt, and the mainstream FOB prices of magnesium alloy in China range from 2,490 to 2,520 US dollars/mt.

Supply and Demand

Recently, the market prices of magnesium alloy have shown a downward trend linked with the prices of magnesium ingot, the raw material. The domestic die-casting industry has entered the traditional off-season, leading to overall weak market demand and insufficient procurement enthusiasm. Currently, just-in-time procurement is the main approach. Magnesium alloy manufacturers have adopted a sales-based production strategy, with some manufacturers reducing their operating rates. The magnesium alloy market is showing a weak supply and demand situation.

Magnesium Powder

Prices

The mainstream tax-included ex-factory prices of 20-80 mesh magnesium powder in China range from 17,450 to 17,550 yuan/mt, and the China FOB prices range from 2,390 to 2,450 US dollars/mt.

Supply and demand

After a concentrated release of volume last week, the transaction enthusiasm in the magnesium powder market has pulled back recently. Magnesium powder manufacturers have returned to the purchasing as needed mode, and the overall supply and demand has remained stable.