SMM Magnesium Morning Meeting Minutes on August 7:
Magnesium Raw Materials
Prices
The ex-factory price (tax not included) of 1-3 dolomite (Wutai) is 78 yuan/mt, and that of 2-4 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
Dolomite prices remain stable, with sufficient market supply. However, demand has increased with the resumption of production at magnesium plants, and prices are expected to remain firm. The most-traded ferrosilicon futures contract 2509 closed at 5,830, up 1.15% or 66 yuan. In the spot market, magnesium prices are supported by tight spot supply and positive macro sentiment, showing significant resilience at the bottom. The ferrosilicon market, however, continues to be affected by the off-season, with weak demand and insufficient upward momentum in prices. Overall, it is expected that the spot price of ferrosilicon will maintain a narrow rangebound fluctuation pattern, and its further trend awaits clear guidance from HBIS's tender price.
Magnesium Ingot
Prices
As of the last working day, the mainstream quotations of magnesium ingots in Fugu remained at 17,400-17,500 yuan/mt, up 100 yuan/mt from the previous working day. The China FOB price was reported at 2,380-2,440 US dollars/mt.
Supply and Demand
Magnesium prices continue to stabilize at highs: the spot quotations of magnesium ingot factories in Fugu remain firm at 17,400 yuan/mt, and the mainstream FOB quotations in Tianjin Port range from 2,410 to 2,420 US dollars/mt. In terms of supply, producers' weekly production decreased by 5.9% MoM, with the industry operating rate remaining at around 54% and inventory levels decreasing by 10.6% MoM. Demand side, due to the summer break, overseas downstream procurement inquiries remain sluggish. The main factors supporting current prices include: firstly, the continuous low operation of factory inventory and good signing of futures orders; secondly, the shipment schedule in mid-August can still drive some rigid procurement demand. It is expected that magnesium prices will continue to maintain a high consolidation pattern 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
The price spread between magnesium and aluminum has been in an inverted state for a long time. Taking magnesium alloy with a high aluminum addition such as AZ91D as an example, its cost pressure is particularly prominent. Currently, the processing fee of magnesium alloy has approached the cost line, with significant bottom support. Overall, it is expected that the price of magnesium alloy will follow the price of magnesium, maintaining a high and firm trend.
Magnesium powder
prices
As of the last working day, the mainstream tax-included ex-factory prices of Chinese magnesium powder with a mesh size of 20-80 were 18,500-18,700 yuan/mt; the Chinese FOB price was $2,530-$2,590/mt.
Supply and demand
Recently, the trading atmosphere in the magnesium powder market has significantly heated up, with overseas order demand being released ahead of schedule. However, the current high prices of raw materials have limited downstream customers' acceptance of high-priced supplies. The market sentiment of fear of high prices remains strong, and some buyers are still maintaining a cautious wait-and-see attitude.
