Magnesium Market Supply Pressure Persists, Demand Divergence Evident [SMM Magnesium Morning Meeting Summary]

SMM Magnesium Morning Meeting Minutes for October 17:

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 price for 2-4 cm dolomite (Wutai) was 128 yuan/mt, also flat. In Shaanxi, the mainstream ex-factory price for 75% ferrosilicon was 6,000-6,100 yuan/mt.

Supply and Demand

Recently, domestic dolomite market prices held steady. Supply and demand sides worked in synergy, providing strong support for the market. Magnesium producers in main production areas maintained stable operations, with sustained release of rigid demand for dolomite creating solid support. Dolomite prices are expected to continue holding up well. For ferrosilicon, the most-traded futures contract, si2509, closed at 5,376 on the previous working day, down 2 yuan or 0.04%. The ferrosilicon futures market fluctuated downward. In the spot market, demand from steel mills weakened, market transactions were moderate, and wait-and-see sentiment was pronounced. Ferrosilicon spot prices are expected to remain in the doldrums.

Magnesium Ingot

Prices

As of the previous working day, mainstream quotations for magnesium ingots in the Fugu area were 16,150-16,250 yuan/mt, down 50 yuan from the previous day. The Chinese FOB price was $2,310-2,350/mt.

Supply and Demand

Magnesium ingot prices fluctuated slightly yesterday. Although some producers showed reluctance to budge on prices, the overall weakness persisted. The core pressure on prices stems from a supply-demand imbalance. On the supply side, multiple magnesium plants have resumed production or are about to start operations, with expectations of new supply intensifying bearish sentiment. On the demand side, although demand from the magnesium alloy sector was moderate, about half of the enterprises in the industry have an entire industry chain setup, meaning much of their raw material demand is met internally, providing limited actual boost to the primary magnesium market. For foreign trade, new overseas orders this month shrank significantly, with most inquiries being for forward delivery in 2026, offering insufficient support to the current market. Overall, with supply continuing to be released and demand struggling to keep pace, the magnesium market is expected to see an inventory buildup in Q4, with prices remaining under downward pressure.

Magnesium Alloy

Prices

As of the previous working day, the mainstream tax-included ex-factory price for magnesium alloy in China was 18,100-18,200 yuan/mt. The Chinese FOB price for magnesium alloy was $2,560-2,600/mt.

Supply and Demand

Recently, magnesium alloy prices fluctuated upward. On the supply side, magnesium alloy producers continued to face tight spot supply and inverted inventory costs. Most established magnesium alloy producers in the market increased their operating rates, and primary magnesium producers in main production areas were actively extending their reach downstream, leading to rapid growth in magnesium alloy supply. On the demand side, most magnesium alloy producers reported undersupply, with spot inquiries being difficult to fulfill in the market. Magnesium alloy prices are expected to largely follow primary magnesium prices and fluctuate downward in the broader trend, but may fluctuate at highs in the near term due to support from its own demand.

Magnesium Powder

Price

As of the previous working day, the mainstream ex-factory price, inclusive of tax, for Chinese magnesium powder (20-80 mesh) was 17,300-17,500 yuan/mt; the Chinese FOB price was $2,450-2,530/mt.

Supply and Demand

The magnesium powder market continues to be affected by declining raw material prices, showing an overall sluggish and declining trend. Demand side, the domestic trade market has stabilized post-holiday, becoming the main support for current demand, with relatively active ordering; in contrast, foreign trade demand remains persistently weak, with overall performance in the doldrums. Against this backdrop, magnesium powder enterprises generally adopt a sales-based production strategy. Current production primarily relies on domestic trade orders and export shipment plans scheduled for late October to early November, maintaining an overall weak and stable supply-demand relationship. Influenced by the continuous price decline, downstream buyers exhibit a clear "rush to buy amid continuous price rise and hold back amid price downturn" mentality, leading to more cautious purchasing behavior.