The magnesium market overall was under pressure, with weak raw materials dragging down downstream price performance [SMM Magnesium Weekly Review].

1 Market Review

1 Dolomite

This week, the ex-factory price (excluding tax) for 1-3 cm dolomite (Wutai) was 108 yuan/mt, flat WoW; the ex-factory price (excluding tax) for 2-4 cm dolomite (Wutai) was 138 yuan/mt, flat WoW.

This week, domestic dolomite market prices continued to show a stable pattern. Supply side, constrained by factors such as expired mining licenses for some small and medium-sized producers, their production resumptions remained unclear; however, leading dolomite producers supported overall industry supply to remain stable. Demand side, performance was firm. Shaanxi and Shanxi, as core production areas for primary magnesium smelting in China, saw related producers maintain stable operating rates, continuously releasing procurement demand for dolomite, providing solid demand support for the market. Overall, the current dolomite market supply-demand pattern tends toward balance, and dolomite prices are expected to maintain a stable trend.

1.2 Magnesium Ingot

1.2.1 Magnesium Ingot (Fugu, Shenmu - Main Production Areas)

This week, magnesium prices were under pressure. As of press time, the mainstream market quotations for 99.90% magnesium ingot in the main production areas were maintained at 15,500-15,600 yuan/mt, down 400 yuan/mt WoW.

This week, magnesium prices accelerated their decline. Supply side, except for a few leading producers with strong financial strength, most primary magnesium smelters were caught in price involution, causing the transaction center of magnesium prices to shift downward rapidly. On some working days, the daily transaction price fell by 150 yuan/mt. Insufficient confidence on the supply side led to continuous gradual declines in magnesium prices. Demand side, downstream wait-and-see sentiment was strong, market procurement pace was relatively slow, downstream purchases were mostly for rigid demand, and market transactions were average. Overall, the pattern of strong supply and weak demand pushed magnesium prices into continuous gradual declines.

1.2.2 Magnesium Ingot (Tianjin Port - FOB China)

This week, the China FOB price was quoted at $2,210-2,260/mt, with an average price of $2,235/mt. This week, foreign trade market quotations were under pressure, and FOB transaction prices once leaned towards the lower end of the range.

Overseas orders before Christmas were basically all released. In terms of transaction patterns, overseas procurement remained primarily for rigid demand, with order sizes generally limited. Affected by the downward trend in magnesium prices, downstream customers held strong bearish sentiment, generally setting their psychological purchase price below $2,200/mt, leading to actual transaction prices this week tending towards the low end of the range. Currently, some traders have received a portion of orders and are waiting for further price adjustments before purchasing.

1.3 Magnesium Powder

This week, the mainstream market price (tax-included, ex-factory) for 20-80 mesh Chinese magnesium powder was 17,100-17,300 yuan/mt; the China FOB price was $2,410-2,450/mt.

This week, magnesium powder prices accelerated their pullback, driven by declining raw material prices. Current market transactions remain dominated by rigid demand, with producers generally maintaining a cautious strategy of producing based on sales. After entering December, order production schedules showed a phased rebound, mainly due to concentrated stockpiling by overseas markets ahead of Christmas. Since some demand was already released in advance in November, current production mainly corresponds to previous orders. However, overall market demand remains weak, with most transactions being rigid purchases. As raw material prices gradually hit bottom and stabilized, magnesium powder prices also entered a stable operating range.

1.4 Magnesium Alloy

This week, the mainstream tax-included ex-factory price for Chinese magnesium alloy was 17,500-17,700 yuan/mt, and the mainstream FOB price for Chinese magnesium alloy was $2,470-2,510/mt.

This week, magnesium alloy prices were under pressure. Specifically, on the supply side, leading magnesium alloy producers have production schedules booked until early January, indicating good market order performance. On the demand side, new energy vehicles (NEVs) and two-wheeled electric vehicles (EVs) are driving steady growth in magnesium alloy demand. Overall, the undersupply situation in the magnesium alloy market is expected to persist until January, with alloy processing fees holding up well in the short term. Although tight spot supply in the magnesium alloy market continues to push processing fees higher, the accelerated decline in raw material prices, particularly the weakness in 99.90% magnesium ingot prices, is suppressing the otherwise strong price performance of magnesium alloy.

2 Weekly Summary

This week, the magnesium market overall exhibited a pattern of strong supply and weak demand, with prices of major products under pressure. On the raw material side, dolomite prices remained stable, supported by a balanced supply-demand situation. Magnesium ingot prices accelerated their decline, with offers for 99.90% magnesium ingot in main production areas dropping to 15,500-15,600 yuan/mt, down 400 yuan/mt WoW. Intensified involution on the supply side and downstream wait-and-see sentiment jointly drove prices lower. FOB offers for foreign trade were also under pressure, with actual transactions leaning towards the lower end of the range, as traders awaited further price corrections. Among downstream products, magnesium powder prices fell faster following the drop in raw materials. Although production schedules saw a short-term rebound due to Christmas stockpiling, overall demand remained weak. The magnesium alloy market, despite facing tight spot supply and full order books, saw its strong processing fee performance suppressed by the weakness in raw material magnesium ingot prices. The market overall displayed characteristics of weak raw material prices transmitting downstream.