Raw Material Prices Stable Magnesium Prices Drop Downstream Market in Wait-and-See Mode [SMM Magnesium Morning Meeting Summary]

SMM Magnesium Morning Meeting Summary on August 28:

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; in Shaanxi, the mainstream ex-factory price for 75 ferrosilicon 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; yesterday, the most-traded 2509 futures contract for ferrosilicon closed at 5,634, down 1.02%, or 58 yuan. In the spot market, the trading atmosphere for ferrosilicon is sluggish, with downstream purchases mainly driven by just-in-time procurement, and ferrosilicon inventory is building up. Considering the strong support from the cost side, it is expected that the price of ferrosilicon will fluctuate rangebound in the short term.

Magnesium ingot

prices

As of the previous working day, the mainstream quotations for magnesium ingots in Fugu area were 17,100-17,200 yuan/mt, a decrease of 50 yuan compared to the previous working day; China's FOB price was $2,350-2,410/mt.

Supply and demand

Yesterday, magnesium prices continued to face pressure, with sluggish market transactions, and magnesium plant inventories saw a slight increase. In terms of supply, as September approaches and summer heat ends, some magnesium plants are gradually resuming production, and new plants plan to start operations at the beginning of September, which is expected to lead to a continuous increase in overall supply. On the demand side, overseas orders currently fall short of expectations, and the concentrated delivery period for traders has not yet arrived, resulting in limited market purchase scale; domestic demand has also entered a phase of weakness. Overall, transactions remained low yesterday, with many downstream players adopting a wait-and-see attitude, and it is expected that magnesium prices will show a slight downward trend subsequently.

Magnesium alloy

prices

As of the previous working day, the mainstream ex-factory price (including tax) for Chinese magnesium alloys was 18,750-18,850 yuan/mt, and the mainstream FOB price for Chinese magnesium alloys was $2,550-2,630/mt.

Supply and demand

Recently, magnesium alloys have been in the doldrums following magnesium ingots. Influenced by the sentiment of "rush to buy amid continuous price rise and hold back amid price downturn," some downstream players are holding a wait-and-see attitude. However, a purchasing manager from a die-casting factory commented that the downside room for the current magnesium ingot price is quite limited, and they will disperse their orders recently to ensure the procurement price remains relatively low. Overall, the transaction volume in the magnesium alloy market is moderate, and it is expected that the price of magnesium alloys will fluctuate in tandem with the price of magnesium ingots.

Magnesium powder

prices

As of the previous working day, the mainstream ex-factory price (including tax) for 20-80 mesh Chinese magnesium powder was 18,300-18,500 yuan/mt; the FOB price for China was $2,500-2,560/mt.

Supply and Demand

Affected by the concentrated shutdowns for maintenance at major domestic steel mills at the end of August, the procurement pace of downstream buyers slowed down, leading to a pullback in the demand for magnesium powder. Currently, magnesium powder companies continue to adopt a strategy of purchasing as needed, maintaining a steady increase in domestic trade purchases recently, while closely monitoring the trend of magnesium prices to flexibly adjust their operations.