Weak market demand, magnesium prices under pressure [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 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 5,800-5,900 yuan/mt.

Supply and demand

Yesterday, the price of dolomite remained stable, with sufficient market supply. However, the demand side increased with the resumption of production at magnesium plants, and it is expected that prices will remain firm in the future. Yesterday, the most-traded ferrosilicon futures contract 2509 closed at 5,674, down 0.56% or 32 yuan. In the spot market, the futures market was in the doldrums, and after a rational return of the ferrosilicon market, wait-and-see sentiment was strong. Market transactions were mainly driven by rigid demand, and it is expected that the spot price of ferrosilicon will remain weak.

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, unchanged from the previous working day. The China FOB price was reported at 2,340-2,440 US dollars/mt.

Supply and demand

In the morning market yesterday, low-priced goods at 17,000-17,050 yuan/mt disappeared in an instant, and traders' inquiries were active. Affected by this, magnesium plants in the main producing areas had a strong reluctance to budge on prices, with magnesium plants firmly quoting at 17,100-17,200 yuan/mt. However, due to the low order-taking prices from downstream buyers and the current strong fear of high prices, transactions at high prices were sluggish. Overall, the current low inventory provides bottom support, but the recent sluggish transactions have led to an increasing trend in magnesium plant inventories. Downstream traders are mostly adopting a wait-and-see approach, and it is expected that magnesium prices may fall slightly in the future due to weak demand.

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

The price spread between magnesium and aluminum remained stable (the price spread between magnesium and aluminum alloy was 1,250 yuan/mt), and the cost-effectiveness advantage of magnesium alloy continued to stand out. On the downstream side, with the implementation of the new national standard for EVs approaching and under the restrictions of the plastic ban, some EVs have begun to gradually increase the use of magnesium alloy die-casting parts, and the demand for magnesium alloy has maintained a mild and stable increase.

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.

Supply and demand

The magnesium powder market has a strong wait-and-see sentiment, and the trading atmosphere is weak. Transactions were sluggish yesterday. The prices of upstream raw materials have remained at a high level, with a clear tug-of-war between sellers and buyers, leading to an overall market deadlock.