Cost Support Collapses, Magnesium Prices Operate Under Pressure Across the Board [SMM Magnesium Morning Meeting Minutes]

SMM Magnesium Morning Meeting Summary on October 16:

Magnesium raw material

prices

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

Supply and demand

Recently, the domestic dolomite market has been stable. Both the supply and demand sides have provided strong support to the market. The current production order in the main magnesium-producing areas is stable, with a continuous release of rigid demand for dolomite, forming a robust support. It is expected that the dolomite price will continue to hold up well. On the previous working day, the most-traded 2509 futures contract for ferrosilicon closed at 5,376, down 0.04%, or 2 points. The ferrosilicon futures market fluctuated downward. In the spot market, steel mill demand weakened, leading to moderate transactions, and a wait-and-see sentiment prevailed. It is expected that the ferrosilicon spot price will remain in the doldrums.

Magnesium ingot

prices

As of the previous working day, the mainstream quotations for magnesium ingots in Fugu were 16,150-16,250 yuan/mt, down 50 yuan from the previous working day. The China FOB price was $2,320-2,350/mt.

Supply and demand

Recently, magnesium prices have been under pressure. There is significant pressure on the supply side, with two magnesium smelters preparing to resume production, and another two primary magnesium smelters expected to produce magnesium ingots next week, increasing expectations of new supply. Although there has been a surge in magnesium alloy demand, half of the magnesium alloy enterprises operate in an entire industry chain model, limiting the positive impact on the primary magnesium market. In foreign trade, the uncertainty of forging or purchasing customs clearance documents from other import and export firms has reduced the participation of some traders, but the turnover of magnesium ingots at Tianjin Port has recently increased, indicating moderate foreign trade demand. Overall, although there has been a slight destocking in the magnesium market, the sentiment of holding back inventory among magnesium smelters has faded, and selling pressure has increased, leading to a continued decline in magnesium prices.

Magnesium alloy

prices

As of the previous working day, the mainstream ex-factory price (including tax) for magnesium alloys in China was 18,100-18,200 yuan/mt, and the China FOB price for magnesium alloys was $2,560-2,600/mt.

Supply and demand

Recently, magnesium alloy prices have fluctuated upward. On the supply side, magnesium alloy manufacturers continue to face tight spot supply and inventory inversion. Most established magnesium alloy manufacturers are increasing their operating rates, and primary magnesium producers in the main producing areas are extending downstream, leading to rapid growth in magnesium alloy supply. On the demand side, many magnesium alloy manufacturers report undersupply, making it difficult to obtain spot inquiries. It is expected that the overall trend of magnesium alloys will follow the downward fluctuation of primary magnesium prices, but in the near term, they will be supported by their own demand and may fluctuate at highs.

Magnesium Powder

Price

As of the previous working day, the mainstream ex-factory prices, inclusive of tax, for 20-80 mesh magnesium powder in China were 17,350-17,550 yuan/mt; the FOB price in China was $2,470-2,540/mt.

Supply and Demand

Currently, the magnesium powder market is operating under pressure, primarily affected by the dual pressures of weakening cost support and sluggish overseas demand. Against this backdrop, stable domestic trade and a wait-and-see attitude in foreign trade have become the dominant market pattern, and prices are expected to remain weak in the short term with little likelihood of improvement.