The Tug-of-War Between Sellers and Buyers Continues, Magnesium Prices in the Doldrums [SMM Magnesium Morning Meeting Summary]

SMM September 1 Magnesium Morning Meeting Minutes:

Magnesium Raw Material

Prices

The ex-factory prices (excluding tax) for 1-3 grade dolomite (Wutai) were 78 yuan/mt, while 2-4 grade dolomite (Wutai) was priced at 128 yuan/mt. In Shaanxi, the mainstream ex-factory price for 75 ferrosilicon ranged between 5,800-5,900 yuan/mt.

Supply and Demand

Dolomite prices remained stable with ample market supply. Demand side, driven by the gradual resumption of magnesium plants, procurement demand showed an upward trend, and dolomite prices are expected to maintain firmness. Last week, the most-traded ferrosilicon futures contract 2509 closed at 5,566, down 0.96% or 54 points WoW. Spot market-wise, ferrosilicon demand lacked support, with downstream enterprises mainly making just-in-time procurement. Given strong cost-side support, ferrosilicon prices are anticipated to fluctuate rangebound in the short term.

Magnesium Ingot

Prices

As of the previous working day, mainstream quotations for magnesium ingots in Fugu were 16,950-17,050 yuan/mt, flat from the prior session. China's FOB price was quoted at $2,340-2,400/mt.

Supply and Demand

Magnesium prices continued in the doldrums last week. Demand side remained weak overall: domestic trade was impacted by the National Day parade, leading to reduced magnesium consumption by end-users. Overseas, traders adhered to the "rush to buy amid continuous price rise and hold back amid price downturn" mentality, with evident willingness to drive down purchasing prices. Market inquiries for low prices were active but actual transactions were limited. Supply-side data showed weekly production at sampled magnesium plants reached 18,076 mt, with operating rates at 59.3%, up 3.8% WoW. September is expected to see gradual recovery in both production and demand, though the market remains in a tug-of-war between sellers and buyers.

Magnesium Alloy

Prices

As of the previous working day, China's mainstream tax-inclusive ex-factory price for magnesium alloy was 18,650-18,800 yuan/mt, while the mainstream FOB price stood at $2,550-2,620/mt.

Supply and Demand

Magnesium alloy prices generally followed the weak trend of magnesium ingots last week, with mixed bullish and bearish factors and cautious downstream operations. Influenced by the "rush to buy amid continuous price rise and hold back amid price downturn" sentiment, some downstream enterprises adopted a wait-and-see approach, slowing procurement pace. With raw material magnesium ingot prices nearing the bottom and limited further downside room, downstream clients have opted for dispersed orders to secure relatively low prices and mitigate future volatility risks. Overall, despite short-term weakness dragged by magnesium ingots, dispersed procurement supports actual demand, while low inventory provides a buffer for prices. The magnesium alloy price is expected to follow the magnesium ingot trend and fluctuate rangebound at high levels, with relatively small possibilities for significant changes in either direction.

Magnesium powder

prices

as of the last working day, the mainstream ex-factory prices for 20-80 mesh magnesium powder in China (including tax) ranged between 18,150-18,350 yuan/mt, while the FOB price in China was $2,500-2,550/mt.

Supply and demand

Last week, the magnesium powder market showed slightly insufficient support from underlying demand, and prices experienced a minor decline influenced by raw material prices. The market is expected to remain in the doldrums in the short term, with attention needed on the recovery of demand during the traditional peak season in September.