SMM November 10 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 5,700-5,800 yuan/mt.
Supply and Demand
Recently, Wutai dolomite prices held steady. Magnesium plants in the main production areas maintained stable operations, with sustained release of rigid demand for dolomite providing strong support. Dolomite prices are expected to hold up well. The most-traded ferrosilicon futures contract, ferrosilicon 2509, closed at 5,526 on the previous working day, down 0.4% or 22 points. Currently, most ferrosilicon prices have bottomed out and stabilized. Rising costs for raw materials like lump coal and semi coke have pushed up magnesium costs, providing underlying support and making further ferrosilicon price declines difficult. However, the supply-demand imbalance limits the potential for a ferrosilicon price rebound. Ferrosilicon prices are expected to fluctuate rangebound.
Magnesium Ingot
Prices
Today, mainstream quotations for magnesium ingots in the Fugu area were 16,300-16,400 yuan/mt, up 200 yuan/mt from the previous working day; the China FOB price was $2,270-2,340/mt.
Supply and Demand
Domestic magnesium prices held up well last week. Significant increases in coal prices substantially raised costs for primary magnesium smelters, strengthening their reluctance to sell and prompting active price hikes. However, from an overall supply-demand perspective, supply continued to strengthen, with the weekly operating rate rising to 73.1%, up 3.3% WoW, while plant inventory levels also increased by 4.8%. Demand side, new overseas orders were limited. Traders and downstream magnesium plants largely maintained strategies of buying the dip and restocking based on immediate needs. Overall trading atmosphere was mediocre, with the market showing an oversupply pattern. Under fundamental pressure, magnesium prices still face some downward pressure.
Magnesium Alloy
Prices
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
Last week, magnesium alloy prices followed primary magnesium in a gradual decline, but alloy processing fees remained firm. Market supply and demand indicate a short-term structural imbalance in the magnesium alloy market. Production side operating rates stayed high, and the previously tight supply situation has eased moderately. However, most enterprises still operate based on order books, with some manufacturers' production schedules filled until mid-November. Looking ahead, as upstream magnesium alloy producers accelerate production, the supply shortage is expected to ease effectively. Currently, downstream die-casting plants show low acceptance of higher processing fees. Processing fees are expected to remain firm in the short term but face a pullback risk later.
Magnesium Powder
Price
Today, the mainstream ex-factory price for 20-80 mesh magnesium powder in China, including tax, was 17,500-17,700 yuan/mt; the FOB price in China was $2,440-2,540/mt.
Supply and Demand
Last week, the magnesium powder market continued its sluggish trend, with downstream orders remaining at low levels. Since the beginning of November, market inquiry activity has declined further. During the same period, domestic steel mills widely implemented production cuts, leading to significantly insufficient actual demand support for magnesium powder. Although current quotations remained stable, downstream users generally adopted a wait-and-see attitude, with actual purchase willingness being low. On the supply side, the overall operating rate of the magnesium powder industry in October stayed at a low level of 43%, with most enterprises continuing to implement a sales-based production strategy. Production control reflected insufficient market confidence. Under the dual effects of weak demand and supply contraction, magnesium powder prices are expected to face continued downward pressure in the medium and long-term.
