Magnesium Producers' Price Defense Line Loosens, Short-Term Magnesium Prices May Remain in the Doldrums Under Dual Pressure of Supply and Demand [SMM Magnesium Morning Meeting Minutes]

SMM Magnesium Morning Meeting Minutes on Sep 2:

Magnesium raw material

prices

The ex-factory tax-excluded prices for 1-3 cm dolomite (Wutai) stood at 78 yuan/mt, while 2-4 cm 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 currently remain stable with ample market supply. Demand side, driven by gradual production resumptions at magnesium plants, procurement demand has shown growth momentum. Dolomite prices are expected to maintain firmness. Last week, the most-traded ferrosilicon futures contract fer2509 closed at 5,532, down 32 points (-0.61%). Spot market-wise, ferrosilicon lacks strong demand support, with downstream enterprises mainly making just-in-time procurement. Given robust 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 in Fugu stood at 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

Yesterday, leading producers held firm offers at 17,100-17,200 yuan/mt with minimal transactions, while mainstream producers quoted around 17,000 yuan/mt. Recent market purchases predominantly involved bargain-down purchasing, leaving room for negotiation on actual transaction prices. Smaller magnesium plants lowered spot offers to 16,850-16,800 yuan/mt, further widening the overall quotation range. Currently, the magnesium market shows stronger supply than demand. Downstream procurement enthusiasm remains subdued due to the "rush to buy amid continuous price rise and hold back amid price downturn" sentiment. Short-term magnesium prices are expected to stay in the doldrums, though pre-National Day purchases may spur demand and potentially trigger a rebound.

Magnesium alloy

As of the previous working day, China's mainstream tax-included ex-factory price for magnesium alloy ranged 18,600-18,750 yuan/mt, with FOB prices at $2,550-2,620/mt.

Supply and demand

Yesterday, magnesium alloy prices generally followed the weak trend of magnesium ingots. The "rush to buy amid continuous price rise and hold back amid price downturn" mentality led some downstream enterprises to adopt wait-and-see attitudes, slowing procurement pace. Processing fee-wise, low inventory provided a buffer for magnesium alloy prices, keeping alloy processing fees firm. Some alloy producers reported upward price adjustments, though actual transactions await market confirmation.

Magnesium powder

prices

As of the previous working day, China's mainstream tax-included ex-factory price for 20-80 mesh magnesium powder stood at 18,150-18,350 yuan/mt, with FOB prices at $2,500-2,550/mt.

Supply and Demand

The magnesium powder market has shown sluggish performance recently, with low inquiry activity from downstream sectors and generally insufficient purchase willingness. Despite approaching the traditional period of the National Day military parade, market demand has not exhibited the expected signs of release, and the overall transaction atmosphere remains weak. Supply side, magnesium powder production in August showed a contraction trend, down 10.41% MoM. The market is expected to maintain a sluggish trend in the short term, with close attention needed on downstream restocking movements and raw material price fluctuations after the parade.