Magnesium Prices Under Pressure, Market Transactions Sluggish [SMM Magnesium Morning Meeting Summary]

SMM Magnesium Morning Meeting Summary on August 19:

Raw Material Prices

The ex-factory price (excluding tax) for 1-3 grade dolomite (Wutai) is 78 yuan/mt, and for 2-4 grade dolomite (Wutai) it is 128 yuan/mt; the mainstream ex-factory price for 75 ferrosilicon in Shaanxi is 5,800-5,900 yuan/mt.

Supply and Demand

Currently, the price of dolomite is stable, with market supply remaining ample. On the demand side, as magnesium plants gradually resume production, procurement demand has shown an increasing trend, and it is expected that the price of dolomite will continue to be firm. The most-traded silicon iron futures contract 2509 closed at 5,880, down 0.37%, or 22 yuan. In the spot market, sentiment has returned to rationality, and actual demand from steel mills for silicon iron has not seen significant fluctuations. Support from the demand side remains steady, reducing disturbances to prices, which are maintaining a stable trend.

Magnesium Ingot Prices

As of the previous working day, the mainstream quotations for magnesium ingots in Fugu were 17,250-17,350 yuan/mt, down 50 yuan from the previous working day; the FOB China price was $2,380-2,430/mt.

Supply and Demand

In the morning, magnesium plants held back sales, with main producing areas quoting around 17,300 yuan/mt. Some smaller plants had room for price negotiations, but market transactions were scarce. In the afternoon, some magnesium plants lowered prices to stimulate transactions, leading to a small amount of magnesium ingot spot resources available at 17,200 yuan/mt. On the supply side, recently, magnesium plants that were under maintenance have resumed production, resulting in a slight increase in magnesium ingot supply. On the demand side, with the overseas summer break coming to an end, there is a slight increase in magnesium ingot demand. Overall, the magnesium ingot market is in a state of supply-demand balance. However, due to strong fear of high prices among buyers, the purchasing pace is slow, and magnesium prices are in the doldrums.

Magnesium Alloy Prices

As of the previous working day, the mainstream ex-factory price (including tax) for Chinese magnesium alloys was 18,900-19,000 yuan/mt, and the mainstream FOB China price was $2,580-2,650/mt.

Supply and Demand

Yesterday, magnesium alloy prices were closely linked to upstream raw material prices. Some magnesium alloy producers have entered a regular equipment maintenance phase, directly leading to a slight contraction in effective market supply, with short-term supply release somewhat restricted. Affected by the current high prices of magnesium alloys, downstream enterprises are adopting a cautious procurement attitude, mainly focusing on "restocking as needed and meeting essential demands," with little willingness to proactively expand procurement scales. The magnesium alloy market currently exhibits a "weak supply and weak demand" situation, and it is expected that prices will continue to be influenced by fluctuations in the price of raw material magnesium ingots, maintaining a synchronized adjustment trend.

Magnesium Powder

Prices

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

Supply and Demand

The current purchasing pace for magnesium powder has slowed down. With the weakening momentum of raw material producers refusing to budge on prices, downstream buyers have a stronger wait-and-see sentiment, generally expecting further price adjustments before re-entering the market for replenishment. The market is showing a typical "supply increase, demand waiting" game situation.