Supply-demand imbalance The magnesium market was in the doldrums today [SMM Magnesium Morning Meeting Minutes]

SMM Dec 08 Magnesium Morning Meeting Minutes:

Magnesium Raw Material

Prices

Ex-factory prices, excluding tax, for 1-3 cm dolomite (Wutai) stood at 108 yuan/mt, flat from the previous working day; for 2-4 cm dolomite (Wutai) at 128 yuan/mt, flat from the previous working day; mainstream ex-factory prices for 75 ferrosilicon in Shaanxi were 5,650 yuan/mt.

Supply-Demand

Recently, dolomite prices in Wutai 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 hold up well. The most-traded ferrosilicon futures contract, 2603, closed at 54,746 on the previous working day, down 30. In the spot market, ferrosilicon spot cargo was relatively ample. Downstream steel mills gradually entered the tender market at the beginning of the month, and market inquiries were relatively active. Supported by costs, ferrosilicon prices are expected to consolidate at low levels.

Magnesium Ingot

Today, mainstream quotations for magnesium ingot in Fugu region were 15,800-15,900 yuan/mt, flat from the previous working day; China FOB prices were quoted at $2,230-2,300/mt.

Supply-Demand

Last week, magnesium prices were under pressure. High daily output increased inventory pressure for primary magnesium smelters in the main production area. Consequently, smelters' reluctance to sell weakened. Combined with the "rush to buy amid continuous price rise and hold back amid price downturn" mentality, downstream purchasers' procurement sentiment was relatively negative, leading to sluggish market inquiries. Primary magnesium smelters had to lower prices to stimulate transactions, causing magnesium prices to fall continuously. Overall, primary magnesium production remained high and rising, while magnesium alloy demand was insufficient to reverse the current supply-demand pattern of strong supply and weak demand in the primary magnesium market. The magnesium market is expected to remain under pressure.

Magnesium Alloy

Today, mainstream ex-factory prices, including tax, for magnesium alloy in China were 17,800-18,000 yuan/mt; China FOB prices for magnesium alloy were $2,490-2,530/mt.

Supply-Demand

Last week, magnesium alloy prices moved in sync with magnesium ingot. On the supply-demand side, end-use demand from sectors such as NEVs and two-wheeled EVs provided significant support. Magnesium alloy plants continued production based on order schedules, with some leading manufacturers scheduled until month-end. Spot magnesium alloy cargo was relatively tight in the market. The magnesium alloy market is expected to maintain firm processing fees, with overall magnesium alloy prices fluctuating in sync with raw material costs.

Magnesium Powder

Prices

Today, mainstream ex-factory prices, including tax, for 20-80 mesh magnesium powder in China were 17,000-17,200 yuan/mt; China FOB prices were $2,410-2,450/mt.

Supply-Demand

Although overseas orders for magnesium powder were released last month, overall downstream demand remained weak, with orders mostly characterized by on-demand shipments. The industry's operating rate remained at a low level of 49.88% in November, and overall order performance was still unsatisfactory. Affected by the decline in raw material prices, magnesium powder prices continued their downward trend last week.