The Magnesium Market Remained in a Stalemate, with Prices Fluctuating Rangebound [SMM Magnesium Weekly Review]

1 Market Review

1 Dolomite

This week, the ex-factory prices (excluding tax) for 1-3 cm dolomite (Wutai) and 2-4 cm dolomite (Wutai) were 78 yuan/mt and 128 yuan/mt, respectively, remaining basically stable.

Dolomite prices held steady this week. Supply side showed significant regional divergence, with leading producers in Wutai still suspending production and currently delivering from inventory. Meanwhile, Hubei-based manufacturers maintained normal operations, stabilizing supply to partially fill the gap. Overall supply remained balanced. Demand for dolomite gradually increased as magnesium plants that previously halted production due to high-temperature maintenance resumed operations, and those planning restarts initiated production. The ongoing resumptions are expected to drive dolomite demand upward. Considering recent heavy rainfall in Shanxi and rising freight costs, dolomite prices are projected to increase upon delivery.

1.2 Magnesium Ingot

1.2.1 Magnesium Ingot (Fugu, Shenmu - Main Production Areas)

This week, mainstream quotations for 99.90% magnesium ingots in major production areas ranged from 16,950-17,050 yuan/mt, with prices fluctuating rangebound, down 50 yuan/mt WoW from last Thursday.

Magnesium prices fluctuated rangebound this week. At the week's start, the quotation range widened among producers in main regions, with leading plants holding strong offers at 17,000 yuan/mt due to tight sales sentiment, while smaller mills adjusted prices flexibly, pushing transaction prices down to 16,800 yuan/mt. However, mid-week market sentiment improved as some traders entered procurement, lifting prices back to 17,000 yuan/mt. Overall, downstream buyers maintained bearish expectations, with transactions dominated by just-in-time procurement. Production resumptions added supply pressure, keeping short-term prices under pressure.

1.2.2 Magnesium Ingot (Tianjin Port - FOB China)

This week, FOB China prices were quoted at $2,360-2,420/mt, averaging $2,390/mt. FOB quotations remained basically stable, edging up slightly after mid-week, primarily supported by traders' firm high-end offers.

Overseas order bookings were generally sluggish this week, though some late-August orders gradually reached traders and producers. Consequently, most traders adopted a wait-and-see approach, actively seeking low-cost cargoes to fulfill contracts. The "rush to buy amid continuous price rise and hold back amid price downturn" mentality prevailed. As prices showed signs of stabilization mid-week, some traders gradually entered the market. On quotations, most traders maintained high tax-inclusive offers, while downstream clients preferred comparing SHFE/LME price ratios, prolonging negotiations. By late-week, mainstream transaction prices consolidated at $2,370-2,400/mt.

1.3 Magnesium Powder

This week, magnesium powder prices declined due to raw material trends. Mainstream tax-inclusive ex-factory prices for 20-80 mesh Chinese magnesium powder stood at 18,200-18,400 yuan/mt, while FOB China prices were quoted at $2,520-2,580/mt.

This week, the magnesium powder market saw sluggish trading, with the overall downtrend persisting. After the National Day military parade concludes, domestic trade is expected to see some demand growth as steel mills gradually resume procurement. Currently, magnesium powder producers generally exhibit weak purchase willingness. Despite a slight rise in raw material prices, downstream users mostly remain on the sidelines, waiting for further price corrections before entering the market. If demand gradually picks up, magnesium powder prices may gain phased support, with short-term expectations pointing to a stable yet slightly fluctuating trend.

1.4 Magnesium Alloy

This week, China's mainstream tax-inclusive ex-factory price for magnesium alloy ranged between 18,700-18,800 yuan/mt, while the mainstream FOB price stood at $2,550-2,620/mt.

This week, magnesium alloy prices generally followed the weak trend of magnesium ingots. Influenced by the "rush to buy amid continuous price rise and hold back amid price downturn" mentality, some downstream enterprises adopted a wait-and-see approach, leading to a slowdown in procurement pace. In terms of processing fees, the current low inventory in the magnesium alloy market provided crucial support and buffer space, helping maintain firm alloy processing fees. Some alloy producers recently reported minor upward adjustments in quotations, but actual order execution remains subject to further observation due to market trading dynamics. Overall, while short-term magnesium alloy prices weakened under the drag of magnesium ingots, dispersed downstream purchases supported actual demand, and low inventory cushioned prices, suggesting narrow fluctuations ahead.

2 Weekly Summary

This week, products across the magnesium industry chain operated under pressure. Magnesium ingots in key production areas adjusted narrowly—leading producers refused to budge on prices early in the week, while smaller mills followed market trends. Mid-week, trader participation drove a mild recovery in transactions, but downstream bearish sentiment and increased supply pressure from production resumptions kept short-term pressure evident. At Tianjin Port, FOB quotations edged up after mid-week, though overseas trading stayed sluggish, with traders seeking lower-priced sources. Dolomite was heavily influenced by magnesium ingots, as producer restarts raised demand expectations. Despite inventory destocking from Wutai’s halted supply, normal output in Hubei, and rain-induced freight hikes in Shanxi, delivery-to-factory prices may rise with magnesium ingot demand. Magnesium powder and alloy were directly weighed down by ingots: powder trading remained weak, awaiting post-holiday steel mill restarts, while alloy relied on low inventory to support processing fees but still trended weakly with ingots, likely fluctuating short-term based on ingot volatility.