Magnesium Prices Stabilize as Tug-of-War Between Sellers and Buyers Continues [SMM Magnesium Morning Meeting Summary]

SMM Magnesium Morning Meeting Summary on August 22:

Magnesium raw material

prices

The ex-factory price (excluding tax) for 1-3 grade dolomite (Wutai) was 78 yuan/mt, and for 2-4 grade dolomite (Wutai) it was 128 yuan/mt; the mainstream ex-factory price for 75 ferrosilicon in Shaanxi was 5800-5900 yuan/mt.

Supply and demand

Currently, dolomite prices are stable with ample market supply. On the demand side, driven by magnesium smelters gradually resuming production, procurement demand has shown an increasing trend, and it is expected that dolomite prices will remain firm. Yesterday, the most-traded silicon iron futures contract 2509 closed at 5638, up 0.21%, or 12 yuan. In the spot market, the current silicon iron market shows a strong supply and weak demand pattern, with downstream buyers driving down purchasing prices, leading to a slight decline in silicon iron prices.

Magnesium ingot

prices

As of the previous working day, the mainstream quotations for magnesium ingots in Fugu were 17250-17350 yuan/mt, up 100 yuan from the previous working day; China's FOB price was $2380-2430/mt.

Supply and demand

As of yesterday afternoon, this round of magnesium price declines has temporarily come to an end, with downstream traders gradually entering the market to place orders, causing magnesium prices to bottom out and rebound. Overall, the magnesium market remains in a tug-of-war between sellers and buyers. On the supply side, smelters have successively resumed full production, and recent accumulated inventory still shows a surplus, increasing inventory pressure in the magnesium market. On the demand side, month-end foreign trade deliveries may provide some support to magnesium prices. Currently, FOB quotations show a clear divergence: transactions for spot and shipments before mid-September are concentrated at $2370-2390/mt, while orders for delivery after October, due to cautious observation by traders, generally see higher quotations at $2450-2500/mt.

Magnesium alloy

prices

As of the previous working day, the mainstream ex-factory price (including tax) for Chinese magnesium alloys was 18900-19000 yuan/mt, and the mainstream FOB price for Chinese magnesium alloys was $2580-2650/mt.

Supply and demand

Yesterday, magnesium alloy prices were closely linked to upstream raw material prices, directly influenced by their overall trend. Recently, driven by the new national standard policy for EVs, automakers' demand for lightweight materials has significantly increased, making magnesium alloys an important choice due to their performance advantages. Industry demand has shown a notable rise. According to a magnesium alloy manufacturer, this year's magnesium alloy orders have increased slightly YoY, with steady growth in magnesium alloy demand and firm processing fees. However, given that magnesium alloy prices are consolidating at high levels supported by magnesium ingot prices, downstream die-casting plants show strong resistance, limiting the upward momentum of magnesium alloy processing fees.

Magnesium Powder

Prices

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

Supply and Demand

The purchasing pace in the magnesium powder market has slowed down, with many companies adopting a purchase as needed strategy to cope with raw material price fluctuations. On the production side, there was a positive trend, with output steadily increasing this month. From export data, July exports significantly increased, and part of the August order demand had been released in advance.