Weak Market Demand, Magnesium Prices Under Pressure [SMM Magnesium Morning Meeting Minutes]

SMM October 9 Magnesium Morning Meeting Minutes:

Magnesium Raw Material

Prices

The ex-factory, tax-exclusive price for 1-3 cm dolomite (Wutai) was 108 yuan/mt, flat from the previous working day; the ex-factory, tax-exclusive price for 2-4 cm dolomite (Wutai) was 128 yuan/mt, flat from the previous working day; the mainstream ex-factory price for 75 ferrosilicon in Shaanxi was 6,000-6,100 yuan/mt.

Supply and Demand

Recently, domestic dolomite prices remained stable. Both supply and demand sides worked in synergy, providing strong support for the market. Magnesium plants in the main production areas maintained stable production, with sustained release of rigid demand for dolomite, forming robust support. Dolomite prices are expected to continue holding up well. Yesterday, the most-traded ferrosilicon futures contract, sf2509, closed at 5,472, down 62 points or 1.12%. The ferrosilicon futures market fluctuated downward. In the spot market, ferrosilicon transactions were moderate, with downstream participants showing strong wait-and-see sentiment. Current spot ferrosilicon prices followed the futures trend and remained in the doldrums.

Magnesium Ingot

As of the previous working day, mainstream quotations for magnesium ingots in the Fugu area were 16,450-16,550 yuan/mt, down 50 yuan from the previous working day; China's FOB price was $2,400-2,430/mt.

Supply and Demand

Yesterday, ex-factory prices for 99.90% magnesium ingot in the main production areas trended downward. On the supply side, most primary magnesium smelters experienced inventory buildup to varying degrees during the National Day holiday, leading to increased inventory pressure on the production side, with some manufacturers stimulating transactions through lower prices. On the demand side, uncertainty around customs export policies remained high, and most foreign trade traders were reluctant to take orders at low prices, adopting a wait-and-see stance. Moreover, the prevailing "rush to buy amid continuous price rise and hold back amid price downturn" sentiment among traders kept market purchase willingness low. Overall, 99.90% magnesium ingot prices are expected to remain under pressure in the short term.

Magnesium Alloy

As of the previous working day, the mainstream tax-inclusive ex-factory price for magnesium alloy in China was 18,200-18,300 yuan/mt; China's FOB price for magnesium alloy was $2,590-2,640/mt.

Supply and Demand

Yesterday, domestic magnesium alloy prices followed primary magnesium prices downward. Sustained demand growth has pushed mainstream magnesium alloy manufacturers into a "spot inventory inversion" situation, with most enterprises having full order schedules and some manufacturers raising processing fees accordingly. On the supply side, although alloy producers actively adjusted by increasing operating rates to boost magnesium ingot supply, aiming to alleviate the current supply-demand tension, they have yet to reverse the core undersupply situation. Overall, the strong performance of the domestic magnesium alloy market is expected to continue in the short term, with the tight supply-demand balance unlikely to change soon.

Magnesium Powder

Price

As of the previous working day, the mainstream ex-factory prices, inclusive of tax, for Chinese magnesium powder with a particle size of 20-80 mesh ranged from 17,650 to 17,850 yuan/mt; the FOB price for China was $2,530-$2,590/mt.

Supply-Demand

Wait-and-see sentiment prevailed in the magnesium powder market yesterday. Although there was restocking demand after the holiday, downstream buyers generally rushed to buy amid continuous price rise and held back amid price downturn, amid expectations of a price decline. Additionally, some demand had been front-loaded prior to the holiday, while magnesium plant production remained stable, leading to sluggish procurement activity and weak trading atmosphere in the market.