Strong sentiment for price increase, magnesium prices remained firm today [SMM Magnesium Morning Meeting Summary]

SMM Magnesium Morning Meeting Summary on July 08:

Magnesium Raw Material

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 price of 75 ferrosilicon in Shaanxi ranges from 5,700 to 5,800 yuan/mt.

Supply and Demand

Currently, the overall price trend of the dolomite market is stable. Magnesium plants that underwent maintenance and shutdowns in the early stage have gradually started production, leading to a slight increase in dolomite demand. Considering the current adequate supply of dolomite, it is expected that dolomite prices will remain stable. Yesterday, the futures market of ferrosilicon surged significantly. The closing price of the most-traded ferrosilicon futures contract 2509 was 5,832, with a 0.9% increase, or a 52 yuan rise. The spot market of ferrosilicon held up well yesterday, with downstream enterprises gradually entering the market for purchases. However, due to the lack of demand recovery, the transaction performance was average, and the upward momentum of the ferrosilicon market was insufficient.

Magnesium Ingot

Prices

Today, the mainstream quotations of magnesium ingots in the Fugu area have been raised to 17,100-17,200 yuan/mt, an increase of 250 yuan/mt compared to the previous working day. The China FOB price is reported at 2,320-2,400 US dollars/mt.

Supply and Demand

Driven by the positive sentiment in the overall market, confidence in the magnesium market's supply side has significantly increased, and magnesium plants have become more reluctant to sell. Coupled with the recent concentrated release of downstream purchases, this has jointly pushed magnesium prices to continue rising at a high level. Currently, the actual supply of magnesium plants that have resumed production in the main producing areas is still relatively limited, and magnesium plants generally have a tendency to hold onto their inventory. A large trader pointed out that as magnesium plants in the main producing areas gradually enter the summer maintenance period, the market bearish sentiment triggered by the previous loose supply will gradually fade away, and the magnesium market is expected to shift from bearish to bullish.

Magnesium Alloy

Prices

As of yesterday, the mainstream tax-included ex-factory price of magnesium alloy in China ranges from 18,450 to 18,650 yuan/mt, and the mainstream FOB price of magnesium alloy in China ranges from 2,510 to 2,590 US dollars/mt.

Supply and Demand

Yesterday, the price of magnesium alloy followed the upward trend of raw material prices. A die-casting plant manager stated that the current increase exceeds the acceptable limit, and the willingness to purchase in the near future is low. It is expected that purchases will be made at an appropriate time after subsequent price pullbacks.

Magnesium Powder

Prices

As of yesterday, the mainstream tax-included ex-factory price of 20-80 mesh magnesium powder in China ranges from 18,100 to 18,300 yuan/mt, and the China FOB price ranges from 2,490 to 2,530 US dollars/mt.

Supply and Demand

Affected by the upward fluctuation in the price of magnesium ingot raw materials, the price of magnesium powder has experienced a one-day increase. However, due to the weak demand from downstream steel enterprises and the continuous wait-and-see attitude of overseas buyers, the overall transaction performance in the market has been sluggish.