Magnesium prices are consolidating at a high level, with strong wait-and-see sentiment downstream [SMM Magnesium Morning Meeting Summary]

SMM Magnesium Morning Meeting Summary on August 4:

Magnesium raw material

prices

The ex-factory price (tax not included) of 1-3 dolomite (Wutai) is 78 yuan/mt, and the ex-factory price (tax not included) of 2-4 dolomite (Wutai) is 128 yuan/mt. The mainstream ex-factory price of 75 ferrosilicon in Shaanxi is 5,800-5,900 yuan/mt.

Supply and demand

Last week, dolomite prices remained stable, with sufficient market supply. However, demand increased as magnesium plants resumed production, and it is expected that prices will remain firm in the future. The most-traded ferrosilicon futures contract 2509 closed at 5,682 yesterday, down 1.8% or 104 yuan. In the spot market, the futures market pulled back slightly last Friday. Affected by the overall market sentiment, downstream procurement slowed down, and wait-and-see sentiment was strong. It is expected that ferrosilicon prices will continue to decline in the future.

Magnesium ingot

prices

As of the last working day, the mainstream quotation of magnesium ingots in Fugu region remained at 17,050-17,150 yuan/mt, down 50 yuan from the previous working day. The China FOB price was reported at 2,340-2,440 US dollars/mt.

Supply and demand

Last week, magnesium prices showed a high-level consolidation trend. Due to the positive effects of the "anti-rat race" policy, speculative demand was concentratedly released, and magnesium prices surged by 800 yuan/mt in a single week amid collective price hikes by upstream and downstream players. Magnesium prices were trapped in a high-price dilemma, with both upward and downward movements being difficult. Specifically, on the morning of last Monday, traders entered the market in a concentrated manner, clearing out low-priced supplies at 17,000 yuan/mt. Magnesium plants then raised prices to 17,100-17,200 yuan/mt. After a small amount of transactions at 17,100 yuan/mt, magnesium plants in the main producing areas collectively quoted 17,200 yuan/mt, with some leading magnesium plants even quoting 17,300 yuan/mt. At this point, magnesium plant quotations reached their peak. Affected by the low prices of previous orders, traders had low purchase willingness, and magnesium prices remained in a high-price stalemate. On last Thursday, some magnesium plants' reluctance to budge on prices weakened, and the supply of magnesium at 17,100 yuan/mt increased. Subsequently, influenced by the mainstream transaction price of magnesium plants dropping to 17,100 yuan/mt last Friday, the price center of magnesium slightly decreased.

Magnesium alloy

prices

As of the last working day, the mainstream tax-included ex-factory price of magnesium alloy in China was 18,700-18,800 yuan/mt, and the mainstream FOB price of magnesium alloy in China was 2,580-2,660 US dollars/mt.

Supply and demand

Last week, magnesium alloy prices remained firm at a high level, following the price trend of magnesium ingot raw materials. However, downstream die-casting plants indicated that the current magnesium alloy prices exceeded their procurement expectations, and they only maintained just-in-time procurement. The transaction atmosphere in the magnesium alloy market was slightly sluggish.

Magnesium powder

prices

As of the last working day, the mainstream tax-included ex-factory price of 20-80 mesh magnesium powder in China was 18,250-18,450 yuan/mt, and the China FOB price was 2,510-2,580 US dollars/mt.

The supply and demand

in the magnesium powder market remained in the doldrums last week, with a clear tug-of-war between sellers and buyers. Although the firm prices of raw materials provided some support for the cost of magnesium powder, the center of market bargaining still shifted slightly downward amid the lack of large-order demand.