Supply and Demand Deadlock Persists, Magnesium Price in the Doldrums Pattern Hard to Break [SMM Magnesium Morning Meeting Minutes]

SMM November 3 Magnesium Morning Meeting Minutes:

Magnesium Raw Materials

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 5,700-5,800 yuan/mt.

Supply and Demand

Recently, Wutai dolomite prices held steady. Magnesium plants in the main production area maintained stable production, with sustained release of rigid demand for dolomite providing strong support. Dolomite prices are expected to continue holding up well. In the previous working day, the most-traded ferrosilicon futures contract, fer2509, closed at 5,510, down 16 yuan, a decrease of 0.29%. In the spot market, a new round of electricity price increases raised ferrosilicon production costs, with most ferrosilicon smelters operating at losses. Consequently, ferrosilicon producers' willingness to hold prices firm recovered somewhat. Ferrosilicon prices are expected to remain firm.

Magnesium Ingot

Today, mainstream quotations for magnesium ingot in the Fugu area were 16,100-16,200 yuan/mt, flat from the previous working day; the China FOB price was $2,270-2,340/mt.

Supply and Demand

Due to weak market transactions, magnesium plants in the main production area lowered their quotations, with the mainstream transaction price at 16,100 yuan/mt. Some downstream buyers indicated they would not consider purchasing for now, adopting a wait-and-see approach towards future magnesium price trends. According to magnesium plants in the main production area, coal and ferrosilicon prices fluctuated at highs, resulting in high plant operating costs and strong cost support for magnesium prices. The room for further short-term magnesium price declines is limited. As centralized heating in the north has started and winter coal stockpiling purchases are underway, domestic coal prices held up well. Cost side, magnesium prices are expected to maintain strong support. Overall, magnesium ingot prices are expected to be under pressure, but with limited downside room.

Magnesium Alloy

Today, the mainstream tax-included ex-factory price for magnesium alloy in China was 18,050-18,150 yuan/mt; the China FOB price for magnesium alloy was $2,510-2,580/mt.

Supply and Demand

Recently, magnesium alloy prices moved higher in line with magnesium ingot prices, with processing fees remaining firm. Market orders were concentratedly released, and enterprise operating rates stayed high. Although the tight supply situation eased slightly, most enterprises were still producing against order backlogs, and the tight spot supply continued, supporting high magnesium alloy processing fees. However, it is worth noting that magnesium alloy capacity in the primary magnesium production areas is gradually being released, which may increase the availability of low-priced material in the future market.

Magnesium Powder

Prices

Today, the mainstream tax-included ex-factory price for 20-80 mesh magnesium powder in China was 17,250-17,450 yuan/mt; the China FOB price was $2,410-2,520/mt.

Supply-Demand

Recently, the magnesium powder market has been generally mediocre, with purchasing parties showing low willingness to enter the market and generally adopting a wait-and-see attitude. Influenced by the "rush to buy amid continuous price rise and hold back amid price downturn" mentality, downstream inquiries and transactions have been sluggish, and both domestic and international trade orders have performed moderately. Currently, most producers continue to adopt a cautious strategy, primarily producing based on sales and scheduling production according to orders. Overall market sentiment remains dominated by a wait-and-see approach.