Raw Material Prices Stabilize, Magnesium Prices Rebound: Tug-of-War Between Sellers and Buyers Continues in the Doldrums [SMM Magnesium Morning Meeting Summary]

SMM Magnesium Morning Meeting Summary on August 18:

Magnesium Raw Materials

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 is 5,800-5,900 yuan/mt.

Supply and Demand

The price of dolomite remains stable, with sufficient market supply. However, demand has 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 5,744, down 2.51% or 126 yuan. In the spot market, on the supply side, although current ferrosilicon inventory remains low, with the gradual restoration of corporate profit margins in the early stage, ferrosilicon production has shown a rebound. On the demand side, the off-season effect continues to ferment, suppressing the actual procurement demand for ferrosilicon, and the overall demand-side support is weak. Overall, the current spot market supply and demand remain balanced, and it is expected that ferrosilicon prices will remain stable in the short term.

Magnesium Ingot

Prices

As of the last working day, the mainstream quotation of magnesium ingot in Fugu area is 17,250-17,350 yuan/mt, down 50 yuan from the previous working day. The China FOB price is reported at 2,380-2,430 US dollars/mt.

Supply and Demand

Last week, magnesium prices showed a trend of strengthening first and then weakening. At the beginning of the week, leading magnesium plants successfully closed deals at the price of 17,500 yuan/mt. The confidence of magnesium smelters in the main producing areas was effectively restored, and the mainstream market quotation remained firm at 17,400-17,500 yuan/mt. However, due to the strong fear of high prices among downstream buyers, coupled with the concentrated procurement of magnesium ingot for foreign trade and magnesium powder demand in the early stage, market demand entered a period of adjustment. Overall transactions were relatively scattered, making it difficult to form a concentrated purchasing force. The demand side of the magnesium market lacked support, and some magnesium plants gradually lowered their quotations. The trading atmosphere in overseas markets remained sluggish, with only a small amount of transactions at the price of 2,400 US dollars/mt at the beginning of the week. As magnesium ingot prices in the main producing areas weakened, from Wednesday onwards, the mainstream quotation range of foreign traders was lowered to 2,380-2,390 US dollars/mt, but actual transactions were limited, with only slightly active inquiries. Overseas downstream customers generally maintained a wait-and-see attitude, believing that the current high prices lacked demand support, and some customers planned to delay procurement until mid-September.

Magnesium Alloy

Prices

As of the last working day, the mainstream tax-included ex-factory price of magnesium alloy in China is 18,900-19,000 yuan/mt, and the mainstream FOB price of magnesium alloy in China is 2,580-2,650 US dollars/mt.

Supply and Demand

Last week, magnesium alloy followed the trend of magnesium ingot prices, strengthening first and then weakening. Supply side, some magnesium alloy producers have entered their regular equipment maintenance cycle, directly leading to a slight contraction in effective market supply; demand side, influenced by the current high prices, downstream enterprises are becoming more cautious in purchasing, mainly focusing on restocking to meet production needs, with little willingness to actively increase purchases. Overall, the magnesium alloy market shows a pattern of weak supply and demand, with magnesium alloy prices expected to continue fluctuating in tandem with raw material prices.

Magnesium powder

prices

as of the previous working day, 20-80 mesh Chinese magnesium powder mainstream ex-factory price including tax was 18,450-18,650 yuan/mt; China FOB price was $2,530-2,580/mt.

Supply and demand

last week, the magnesium powder market saw a significant increase in supply, mainly due to the concentrated release of overseas orders in the previous week, with producers accelerating production schedules for delivery. The current purchasing pace has slowed down, and as the momentum for holding firm on raw material prices weakens, downstream buyers' wait-and-see sentiment is intensifying, generally expecting further price adjustments before re-entering the market to restock. The market exhibits a typical "supply up, demand waiting" game situation.