Magnesium Plants Reluctant to Budge on Prices Loosen, Low-Priced Supplies Emerge Supply and Demand Pressures Keep Magnesium Prices Weak [SMM Magnesium Morning Meeting Summary]

SMM Magnesium Morning Meeting Summary on August 27:

Magnesium raw material

prices

The ex-factory price (excluding tax) for 1-3 grade dolomite (Wutai) is 78 yuan/mt, and the ex-factory price (excluding tax) for 2-4 grade dolomite (Wutai) 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, dolomite prices are 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 dolomite prices will continue to remain firm; yesterday, the most-traded 2509 futures contract for ferrosilicon closed at 5,656, down 0.56%, or 32 yuan. In the spot market, the current ferrosilicon market shows a situation of ample supply but weak demand. Downstream buyers generally adopt a wait-and-see attitude, with purchasing activities mainly focused on restocking to meet basic needs. Considering the two rounds of price increases for semi coke recently, cost support for ferrosilicon is significant, and it is expected that ferrosilicon prices will remain firm.

Magnesium ingot

prices

As of the previous working day, the mainstream quotations for magnesium ingots in Fugu were 17,100-17,300 yuan/mt, down 50 yuan from the previous working day; China's FOB price was $2,360-2,420/mt.

Supply and demand

Yesterday, magnesium prices continued to be under pressure, with low market transactions, leading to a slight increase in magnesium plant inventory. Under these circumstances, some magnesium plants' reluctance to budge on prices has weakened, and lower-priced goods appeared in the market early yesterday, with transaction prices ranging from 17,050-17,100 yuan/mt. However, downstream purchasing interest remains low, and magnesium prices have further softened, with some transactions closing at 17,000 yuan/mt, making the overall market sluggish. On the supply side, with the end of maintenance at magnesium plants, recent magnesium ingot supply has increased, coupled with the gap between the completion of old orders and the delivery date for new orders, resulting in a lack of demand support for magnesium prices. Overall, it is expected that magnesium prices will maintain a weak trend in the short term.

Magnesium alloy

prices As of the previous working day, the mainstream ex-factory price (including tax) for Chinese magnesium alloys was 18,750-18,950 yuan/mt, and the mainstream FOB price for Chinese magnesium alloys was $2,560-2,640/mt.

Supply and demand

Yesterday, magnesium alloy prices were closely linked to upstream raw material prices, directly influenced by their trends. In terms of market fundamentals, demand is steadily improving, with current magnesium alloy processing fees and industry profitability remaining stable. Supported by high magnesium ingot prices, magnesium alloy spot prices continue to consolidate at high levels, causing strong resistance from downstream die-casting factories. It is likely that the current stable pattern will persist in the short term.

Magnesium Powder

Prices

As of the previous working day, the mainstream ex-factory prices (including tax) for 20-80 mesh Chinese magnesium powder were 18,350-18,550 yuan/mt; the FOB China price was $2,510-2,580/mt.

Supply and Demand

Affected by the concentrated maintenance shutdowns at some mainstream steel mills in late August, the procurement pace of downstream end-users has noticeably slowed down, leading to a phased contraction in the demand for magnesium powder. Magnesium powder companies have also postponed their purchasing plans for raw materials such as primary magnesium, to avoid inventory buildup and price fluctuation risks. Currently, the overall trading atmosphere in the domestic market is sluggish, with buyers mainly replenishing stocks in small quantities based on urgent needs, while sellers generally hold onto their inventories, resulting in a more cautious market sentiment.