Magnesium Market Diverges: Ingot Prices Under Pressure While Alloy Prices Strong Amid Tight Supply [SMM Magnesium Morning Meeting Minutes]

SMM October 27 Magnesium Morning Meeting Minutes:

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 5,700-5,900 yuan/mt.

Supply and Demand

Recently, domestic dolomite market prices held steady. Both supply and demand sides provided strong support, with stable production order at magnesium plants in main production areas and sustained release of rigid demand for dolomite, forming robust support. Dolomite prices are expected to continue holding up well; the most-traded ferrosilicon futures contract, ferrosilicon 2509, closed at 5,542 on the previous working day, down 0.07% or 4 points. The ferrosilicon futures market held up well. In the spot market, high semi-coke prices provided cost support, but considering downstream just-in-time procurement, ferrosilicon prices lacked upward momentum. Ferrosilicon prices are expected to fluctuate rangebound in the short term.

Magnesium Ingot

Prices

Today, mainstream quotations for magnesium ingots in Fugu were 16,250-16,350 yuan/mt, down 50 yuan from the previous working day; China's FOB price was $2,320-2,360/mt.

Supply and Demand

Last week, magnesium prices first stabilized then fell, with a clear oversupply situation. Prices were temporarily stable at the start of the week but came under pressure from Wednesday. On the supply side, the operating rate of magnesium plants remained high at 69.4%, and inventory increased 4.89% WoW. High production and inventory suppressed prices, while downstream players were generally bearish and maintained a wait-and-see attitude when plants tried to refuse to budge on prices, resulting in low purchase willingness. Cost side, supported by persistently high mine-mouth coal prices and a slight increase in semi-coke prices last week, maintained some profit margin for plants and provided a floor for magnesium prices. However, dominated by strong supply and weak demand, cost support failed to reverse the downtrend, and magnesium prices are expected to continue declining.

Magnesium Alloy

Prices

Today, the mainstream tax-included ex-factory price for magnesium alloy in China was 18,150-18,250 yuan/mt; China's magnesium alloy FOB price was $2,560-2,610/mt.

Supply and Demand

Recently, the magnesium alloy market showed strong prices and tight supply. Tight spot supply and inverted inventory continued to support firm magnesium alloy processing fees. The core market contradiction lies in the temporary supply-demand mismatch. Magnesium alloy enterprises currently operate at high rates. Although the tight supply situation has eased somewhat, most enterprises still operate on a production schedule basis. Spot magnesium alloy remains tight, and magnesium alloy processing fees hold up well.

Magnesium Powder

Price

Today, the mainstream ex-factory price, including tax, for 20-80 mesh magnesium powder in China was 17,450-17,650 yuan/mt; the FOB price in China was $2,460-2,540/mt.

Supply and Demand

Overall trading activity in the magnesium powder market was not high, with trading volume relatively limited. The current market showed a weak supply-demand pattern: on one hand, production and operating rates on the supply side remained at low levels; on the other hand, demand side mainly relied on just-in-time procurement support, while foreign trade orders saw a significant decline since September, further constraining overall market momentum.