Supply-Demand Weakness Persists, Prices Fluctuate Downward Under Pressure [SMM Magnesium Weekly Review]

1 Market Review

1 Dolomite

This week, the ex-factory price, excluding tax, for 1-3 cm dolomite (Wutai) was 108 yuan/mt, flat WoW; the price for 2-4 cm dolomite (Wutai) was 138 yuan/mt, flat WoW.

Dolomite prices held steady this week. Supply side, producers maintained normal production as planned, with stable supply availability. Demand side, the overall operating rate of magnesium plants nationwide remained at last month's high level; although some producers conducted short-term maintenance last week, it did not significantly impact overall demand, and downstream procurement support remained firm. Overall, the dolomite market is in a tight supply-demand balance, and prices in the Wutai region are expected to hold up well going forward.

1.2 Magnesium Ingot

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

This week, the mainstream market quotations for 99.90% magnesium ingot in the main production areas were 16,400-16,500 yuan/mt, with prices fluctuating downward.

Magnesium prices trended downward this week. Supply side, magnesium plants maintained normal production pace during the National Day holiday, resulting in relatively stable magnesium ingot supply. With plants in Shaanxi, Ningxia, and other provinces expected to resume production, pressure from increasing magnesium ingot supply is significant in the near term. Willingness to sell ingots was strong, and low-priced sources occasionally emerged in the market this week. Demand side, affected by policy-related news such as forging customs clearance documents, foreign trade orders were concentrated for delivery in early-mid September. Additionally, approaching the National Day holiday, transportation difficulties for magnesium ingots increased, leading to a noticeable decline in market procurement enthusiasm. Demand-side support for the magnesium market was lacking. Overall, the National Day holiday accelerated the inventory buildup pace for magnesium ingot producers, increasing supply-side pressure, while demand-side support remained insufficient. Magnesium prices are expected to remain under pressure.

1.2.2 Magnesium Ingot (Tianjin Port - FOB China)

This week, the FOB China price was quoted at $2,380-$2,420/mt, averaging $2,400/mt. Overall FOB quotations shifted lower, reflecting a market sentiment betting on price declines.

FOB quotations for magnesium ingot remained high two days before the holiday. Post-holiday, influenced by the decrease in domestic ex-factory prices and market expectations for a weaker October market, mainstream quotations pulled back to $2,350-$2,380/mt. Currently, downstream buyers maintain a wait-and-see attitude, with no significant increase in procurement volume. According to an SMM survey, tariff declaration policies became stricter in October, requiring strict adherence to relevant regulations for customs clearance procedures, which restricted the circulation of low-priced sources. This policy environment places the October export market on a relatively level competitive playing field. The downward trend in magnesium prices is expected to gradually become apparent this month, and FOB quotations are also projected to continue weakening.

1.3 Magnesium Powder

This week, the mainstream market price, including tax and ex-factory, for Chinese magnesium powder (20-80 mesh) was 17,650-17,850 yuan/mt; the FOB China price was $2,530-$2,590/mt.

Pre-holiday, the magnesium powder market showed clear signs of active raw material procurement. This was driven by concentrated stocking demand ahead of the National Day holiday, as well as the purchasing window created by the pullback in magnesium ingot prices. Downstream enterprises seized the current cost advantages by increasing procurement volumes and simultaneously advancing preparations for both domestic and international orders. Post-holiday magnesium powder orders are expected to increase slightly, but prices will remain under pressure due to raw material influences.

1.4 Magnesium Alloy

This week, the mainstream tax-inclusive ex-factory price of magnesium alloy in China was 18,400–18,550 yuan/mt, and the mainstream FOB price was $2,590–$2,630/mt.

This week, magnesium alloy prices moved under pressure in line with primary magnesium. Supply side, magnesium alloy producers continued to face tight spot supply and inverted inventory costs, with most established producers raising operating rates. Primary magnesium producers in key producing regions are extending further downstream, leading to rapid growth in magnesium alloy supply. Demand side, most magnesium alloy producers reported undersupply in September, with spot inquiries scarce in the market. Supported by NEV demand, magnesium alloy processing fees remained strong. Magnesium alloy prices are expected to fluctuate downward broadly in line with primary magnesium, with occasional slight rebounds possible due to underlying demand support.

2 Weekly Summary

Post-holiday, the magnesium market overall showed weak supply and demand. Raw material side, dolomite prices held steady amid a tight balance. Magnesium ingot offers in main producing regions fell to 16,400–16,500 yuan/mt, as supply increased amid weak demand, compounded by tightening export policies, pulling FOB offers down to $2,380–$2,420/mt. Magnesium powder saw active stockpiling pre-holiday but is expected to weaken post-holiday, with prices under pressure. Magnesium alloy performed relatively firmly, supported by automotive demand, but fluctuated overall due to primary magnesium price drag. Short-term, all segments of the industry chain are expected to remain in the doldrums, with price rebounds contingent on a substantive recovery in demand.