Supply and demand remain at a stalemate, with magnesium prices running steadily at a high level [SMM Magnesium Morning Meeting Summary]

SMM Magnesium Morning Meeting Summary on August 7:

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 ranges from 5,800 to 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 prices are expected to remain firm. On Friday, the most-traded ferrosilicon futures contract 2509 closed at 5,772, down 1.40% or 82 yuan, but up 90 yuan or 1.58% WoW. In the spot market, tight spot supply and macro sentiment provided strong support for magnesium prices at the bottom. Additionally, the off-season effect persisted, and the demand for ferrosilicon spot market limited the upward momentum of ferrosilicon prices. It is expected that the spot price of ferrosilicon will continue to fluctuate rangebound, waiting for guidance from HBIS's tender price.

Magnesium ingot

prices

As of the last working day, the mainstream quotation of magnesium ingot in Fugu remained at 17,200 yuan/mt, up 100 yuan/mt from the previous working day. The China FOB price ranges from 2,340 to 2,440 US dollars/mt.

Supply and demand

Last week, domestic magnesium prices showed a trend of initial stability followed by an increase. At the beginning of the week, magnesium smelters were influenced by factors such as low inventory levels, and their reluctance to budge on prices was strong. Magnesium prices remained firm at 17,100-17,200 yuan/mt. However, due to low order prices from end-users, traders had low purchase willingness, resulting in a stalemate in supply and demand and sluggish market transactions in the first half of the week. As the stalemate continued, some downstream customers made purchases at 17,100 yuan/mt. Magnesium plants, due to tight spot supply, had strong reluctance to sell, with single transaction volumes mostly ranging from 1 to 3 trucks and few large transactions. Magnesium prices thus showed a steady upward trend. Subsequently, magnesium powder orders signed earlier were released in bulk, pushing transaction prices up to 17,300-17,400 yuan/mt. As of the time of writing, the mainstream quotation of magnesium plants in Fugu has been raised to 17,400 yuan/mt, with most 17,300 yuan/mt quotations in the market being short-term futures. Magnesium prices have increased by a total of 250 yuan/mt this week.

Magnesium alloy

prices

As of the last working day, the mainstream tax-included ex-factory price of magnesium alloy in China ranges from 18,950 to 19,050 yuan/mt, and the mainstream FOB price of magnesium alloy in China ranges from 2,610 to 2,670 US dollars/mt.

Supply and demand

A leader from an alloy enterprise pointed out that the price spread between magnesium and aluminum has been in an inverted state for a long time, especially for magnesium alloys with a high aluminum addition such as AZ91D, which have high costs. Currently, the alloy processing fees have approached the cost line, providing strong support at the bottom. Overall, it is expected that magnesium alloy prices will follow the high prices of magnesium, a raw material, and remain firm.

Magnesium powder

pricesAs of the last working day, the mainstream tax-included ex-factory prices for 20-80 mesh magnesium powder in the Chinese market ranged from 18,500 to 18,700 yuan/mt, while the FOB prices in China ranged from $2,530 to $2,590/mt.

Supply and demand

Last week, the trading atmosphere in the magnesium powder market significantly heated up, mainly driven by the concentrated release of overseas orders. To cope with the new tariff policy that is expected to be implemented on October 1, some downstream customers accelerated their export stockpiling ahead of the policy window, causing the order cycle to advance earlier than usual. This surge in demand directly stimulated domestic magnesium plants to increase their procurement of magnesium ingots to ensure production. Currently, the prices of raw materials remain high, limiting the acceptance of high-priced supplies by downstream customers. The market sentiment of fear of high prices remains strong, with some buyers still maintaining a cautious wait-and-see attitude.