The Game Between Cost Support and Demand Leads to Differentiated Price Trends Across Magnesium Varieties [SMM Magnesium Morning Meeting Minutes]

SMM Magnesium Morning Meeting Minutes for December 11:

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 5,600-5,650 yuan/mt.

Supply and Demand

Recently, Wutai dolomite prices held steady. Magnesium producers in the main production area maintained stable production 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, 2603, closed at 5,418 on the previous working day, down 48. In the spot market, affected by the traditional off-season effect, the ferrosilicon market lacked confidence, and magnesium price support was insufficient. Considering significant cost support, ferrosilicon prices are expected to maintain a bottom consolidation trend.

Magnesium Ingot

Today, mainstream quotations for magnesium ingots in the Fugu area were 15,400-15,500 yuan/mt, down 100 yuan from the previous working day; the China FOB price was $2,210-2,260/mt.

Supply and Demand

Yesterday, magnesium prices were under pressure. As prices fell to 15,500 yuan/mt, some downstream users gradually entered the market for procurement. Recent market procurement volume saw a slight rebound. According to SMM, over 2,000 mt of magnesium ingots were traded nationwide yesterday, indicating a recovery in market transactions. From a supply-demand perspective, current market transactions have not altered the fundamental situation of oversupply. Coupled with cautious downstream procurement, which remains focused on essential stockpiling, magnesium prices are expected to lack upward momentum, and the magnesium market may continue to operate under pressure.

Magnesium Alloy

Today, the mainstream tax-included ex-factory price for magnesium alloy in China was 17,500-17,700 yuan/mt; the China FOB price for magnesium alloy was $2,470-2,510/mt.

Supply and Demand

Recently, magnesium alloy prices showed a phenomenon where the decline in raw material magnesium ingot prices suppressed the increase in magnesium alloy prices, and transaction prices for magnesium alloy were relatively chaotic. Driven by previous growth in end-use demand, the magnesium alloy market experienced a supply-demand imbalance. Most alloy producers were engaged in order-based production. As a result, magnesium alloy prices held up well. However, due to differences in order situations among alloy producers, the transaction range for magnesium alloy widened.

Magnesium Powder

Prices

Today, the mainstream tax-included ex-factory price for 20-80 mesh magnesium powder in China was 16,700-16,900 yuan/mt; the China FOB price was $2,380-2,410/mt.

Supply and Demand

Recently, supply in the magnesium powder market showed a slight rebound, with some producers having gradually procured raw material magnesium ingots in the market. Currently, downstream demand is primarily driven by rigid procurement, and the overseas market is mainly fulfilling previously received orders, with the overall market operating steadily. It is expected that magnesium powder prices will continue to be influenced by raw material price trends, maintaining a weak operating trend.