Raw Materials Hold Steady, Magnesium Ingots Under Pressure, Alloy Demand Provides Significant Support [SMM Magnesium Morning Meeting Minutes]

SMM Magnesium Morning Meeting Minutes on Oct 13:

Magnesium Raw Material

Prices

The ex-factory price, excluding tax, for 1-3 cm dolomite (Wutai) was 108 yuan/mt, flat from the previous working day; the ex-factory price, excluding tax, 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 market prices held steady. Both supply and demand sides worked in synergy, providing strong support for the market. Magnesium producers 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. In the previous working day, the most-traded ferrosilicon futures contract, sf2509, closed at 5,436, down 36 yuan or 0.66%. The ferrosilicon futures market fluctuated downward. In the spot market, ferrosilicon transactions were average, with downstream participants showing a strong wait-and-see sentiment. Spot ferrosilicon prices are expected to remain in the doldrums.

Magnesium Ingot

Prices

As of the previous working day, mainstream quotations for magnesium ingot in Fugu were 16,300-16,400 yuan/mt, down 100 yuan from the previous working day; China's FOB price was $2,400-2,430/mt.

Supply and Demand

Last week, magnesium prices trended downward. On the supply side, magnesium producers maintained normal production pace during the National Day holiday, keeping magnesium ingot supply relatively stable. Producers in Shaanxi, Ningxia, and other provinces resumed production as planned, increasing pressure for future supply growth. Willingness to sell magnesium ingot was strong, with occasional low-priced sources emerging in the market this week. On the demand side, affected by policy news such as forging or purchasing customs clearance documents from other import and export firms, foreign trade orders were concentrated for delivery in early to mid-September. Additionally, approaching the National Day holiday, transportation difficulties for magnesium ingot increased, significantly reducing market purchasing enthusiasm. Demand-side support for the magnesium market was lacking. Overall, the National Day holiday accelerated inventory buildup at magnesium ingot producers, increasing supply-side pressure. With insufficient demand-side support, magnesium prices are expected to operate under pressure.

Magnesium Alloy

Prices

As of the previous working day, the mainstream tax-included ex-factory price for magnesium alloy in China was 18,250-18,350 yuan/mt; China's FOB price for magnesium alloy was $2,600-2,630/mt.

Supply and Demand

Last week, magnesium alloy prices followed primary magnesium prices in operating under pressure. On the supply side, magnesium alloy producers continued to face tight spot supply and inventory inversion. Most established magnesium alloy producers increased their operating rates, and primary magnesium producers in main production areas were extending efforts downstream, leading to rapid growth in magnesium alloy supply. On the demand side, most magnesium alloy producers reported undersupply in September, with difficulty in sourcing spot magnesium alloy inquiries. Supported by demand from the NEV sector, magnesium alloy processing fees held up strongly. Magnesium alloy prices are broadly expected to fluctuate downward following primary magnesium prices, but may see short-term fluctuations at highs due to inherent demand support.

Magnesium Powder

Price

As of the previous working day, the mainstream ex-factory prices, including tax, for 20-80 mesh magnesium powder in China were 17,600-17,800 yuan/mt; the FOB price in China was $2,520-2,570/mt.

Supply and Demand

Last week, the magnesium powder market was characterized by a strong wait-and-see sentiment. Although there was some post-holiday restocking demand in domestic trade, the mentality of rushing to buy amid continuous price rise and holding back amid price downturn was evident. As prices continued to weaken after the holiday, downstream procurement became more cautious. Overall demand in foreign trade remained sluggish, with limited market trading activity.