Oversupply Situation Difficult to Change, Magnesium Prices Under Pressure [SMM Magnesium Morning Meeting Minutes]

SMM November 19 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 producers in the main production area maintained stable production operations, with continuous release of just-in-time demand for dolomite providing strong support. Dolomite prices are expected to hold up well. The most-traded ferrosilicon futures contract, fer2509, closed at 5,474 on the previous working day, down 88 yuan or 1.58%. Ferrosilicon futures fluctuated rangebound. In the spot market, ferrosilicon supply showed a slight contraction. Demand side, purchasing as needed continued, with downstream customers maintaining rational purchase willingness. Cost side, recent coal price pullbacks transmitted to the semi-coke market, putting semi-coke prices under pressure. However, ferrosilicon producers are still operating near the cost line with limited profit margins. Considering supply-demand and cost factors, ferrosilicon prices are expected to consolidate at the bottom in the short term.

Magnesium Ingot

Today, mainstream quotations for magnesium ingot in Fugu were 16,000-16,100 yuan/mt, down 100 yuan/mt from the previous working day; the China FOB price was $2,240-2,340/mt.

Supply and Demand

Yesterday morning, magnesium producers in the main production area maintained prices at 16,000-16,100 yuan/mt, but market inquiries were sluggish. Downstream users and traders held strong bearish sentiment due to oversupply. Driven by the sentiment of rushing to buy amid continuous price rise and holding back amid price downturn, market procurement was mostly just-in-time procurement. Some primary magnesium smelters reluctantly lowered prices to stimulate transactions. It was learned that a small primary magnesium smelter in the main production area adjusted its quotation from 16,000 yuan/mt to 15,900 yuan/mt successively, increasing the availability of low-priced sources. Overall, magnesium producers have strong reluctance to sell, but under the dual pressure of inventory and capital, some producers may make concessions, leading to a wider range of magnesium ingot quotations. Magnesium prices are expected to remain under pressure.

Magnesium Alloy

Today, the mainstream tax-included ex-factory price for magnesium alloy in China was 17,900-18,050 yuan/mt; the China FOB price for magnesium alloy was $2,500-2,570/mt.

Supply and DemandRecently, magnesium alloy prices were under pressure, dragged down by weaker magnesium ingot raw material prices, while processing fees remained firm. Supply side, most producers maintained orderly production schedules according to order pace, with moderate supply stability. Demand side, new demand from the two-wheeled EV sector continued to be released, providing strong support for the magnesium alloy market. Considering the comprehensive impact of supply-demand dynamics and cost transmission, magnesium alloy prices are expected to remain under pressure in the short term, following the trend of raw material magnesium ingot prices.

Magnesium Powder

Prices

Today, the mainstream tax-inclusive ex-factory price for 20-80 mesh magnesium powder in China was 17,200-17,400 yuan/mt; the FOB price in China was $2,420-2,480/mt.

Supply and Demand

The magnesium powder market continued its downward trend, with prices remaining under pressure and new orders still showing weak growth. Although current prices are already in a low range, downstream customers' purchase willingness has not shown significant recovery, and market transactions are still dominated by rigid demand. Against the backdrop of persistently weak demand, magnesium powder prices are expected to have further room to decline.