Magnesium Plants Refuse to Budge on Prices + Urgent Procurement Demand, Magnesium Market Sees Both Volume and Price Rise [SMM Magnesium Morning Meeting Summary]

SMM Magnesium Morning Meeting Summary on August 21:

Magnesium raw material

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 the Shaanxi region market ranges from 5,800 to 5,900 yuan/mt.

Supply and demand

: Currently, dolomite prices are stable, and market supply remains sufficient. On the demand side, driven by the gradual resumption of production at magnesium plants, procurement demand has shown a growth trend. It is expected that dolomite prices will continue to remain firm in the future. Yesterday, the most-traded ferrosilicon futures contract 2509 closed at 5,620, with a decline of 1.75% or 100 yuan. In the spot market, on the supply side, ferrosilicon smelters resumed production as scheduled, leading to an increase in ferrosilicon supply. On the demand side, downstream demand for ferrosilicon is weak, and the pressure of ferrosilicon inventory accumulation has increased. Overall, the ferrosilicon market is characterized by strong supply and weak demand, and it is expected that ferrosilicon prices will be in the doldrums.

Magnesium ingot

prices

: As of the last working day, the mainstream quotation of magnesium ingots in the Fugu region ranges from 17,200 to 17,300 yuan/mt, an increase of 50 yuan compared to the previous working day. The China FOB price ranges from 2,380 to 2,420 US dollars/mt.

Supply and demand

: Yesterday, the magnesium market showed a trend of recovering transactions and rising prices. Reviewing the transaction situation in the magnesium market yesterday, a small amount was traded at 17,100 in the morning, and magnesium prices showed a downward trend. However, in the afternoon, magnesium prices strengthened, and magnesium plants' reluctance to budge on prices recovered under the call of the association. Rumors spread about magnesium plants refusing to budge on prices at 17,500. Some buyers made transactions at prices ranging from 17,200 to 17,300, with outstanding transaction performance. It is expected that the trading volume in the main producing areas may exceed 2,000 mt. Overall, influenced by the approaching shipping period, the market's procurement demand has become more urgent. Stimulated by the news of magnesium price hikes, transaction performance has been outstanding. Supported by demand, it is expected that magnesium prices will rise slightly in the future.

Magnesium alloy

prices

: As of the last working day, the mainstream tax-included ex-factory price of magnesium alloy in China ranges from 18,800 to 18,900 yuan/mt, and the mainstream FOB price of magnesium alloy in China ranges from 2,570 to 2,640 US dollars/mt.

Supply and demand

: Yesterday, magnesium alloy prices were closely linked with the prices of upstream raw materials. Recently, driven by the new national standard policy for EVs, EV manufacturers have chosen to use lightweight materials such as magnesium alloy. The demand for EVs has surged. The demand for AM60-series magnesium alloy has increased due to its multiple application scenarios in EVs. It is expected that with the subsequent popularization of magnesium replacing aluminum, magnesium replacing iron, and magnesium replacing plastic in the EV application field, the demand for AM60-series magnesium alloy will experience explosive growth.

Magnesium Powder

Prices

As of the previous working day, the mainstream tax-inclusive ex-factory prices for 20-80 mesh Chinese magnesium powder were 18,350-18,550 yuan/mt; the FOB China price was $2,520-2,570/mt.

Supply and Demand

Affected by fluctuations in raw material prices, the purchasing pace of magnesium powder enterprises has slowed down, gradually shifting towards a purchase as needed strategy. This month, magnesium powder production showed an increasing trend, with export data indicating a significant rise in July exports, and part of August's order demand has been released in advance.