Raw Material Cost Support Diverges, Magnesium Market Continues to Fluctuate Downward [SMM Magnesium Morning Meeting Minutes]

SMM December 15 Magnesium Morning Meeting Summary:

Magnesium raw material

prices

1-3 cm dolomite (Wutai) ex-factory price excluding tax is 108 yuan/mt, unchanged from the previous working day; 2-4 cm dolomite (Wutai) ex-factory price excluding tax is 128 yuan/mt, also unchanged from the previous working day; in Shaanxi, the mainstream ex-factory price of 75 ferrosilicon is 5600-5650 yuan/mt.

Supply and demand

Recently, Wutai dolomite prices have held steady, with stable production order at major magnesium-producing regions, continuously releasing rigid demand for dolomite, providing strong support. It is expected that dolomite prices will continue to hold up well. The most-traded 2603 ferrosilicon futures contract closed at 5470, up 24 points from the previous working day. In the spot market, some ferrosilicon smelters have suspended operations due to losses, leading to a slight decrease in supply. However, given the current weak demand, the ferrosilicon market shows a dual weakness in supply and demand, and it is expected that ferrosilicon prices will consolidate at the bottom.

Magnesium ingot

prices

Today, the mainstream quotations in Fugu area are 15400-15500 yuan/mt, down 100 yuan from the previous working day; China's FOB price is $2200-2250/mt.

Supply and demand

Last week, magnesium ingot prices continued to decline rapidly. On the supply side, most primary magnesium smelters are engaged in price competition, with the center of transactions continuously shifting downward. On some working days, the single-day price drop reached 150 yuan/mt, indicating a lack of market confidence and a continuous decline in magnesium prices. Demand remains sluggish, with a strong wait-and-see sentiment among downstream buyers, slow procurement pace, and mainly rigid demand, resulting in sluggish overall transactions. The oversupply situation has not yet been reversed. In the overseas market, orders before Christmas have largely been released. Overseas procurement is still mainly driven by rigid demand, with limited order sizes. Due to the expectation of falling magnesium prices, buyers' bearish sentiment is evident, with the psychological price level generally below $2200/mt, leading to actual transactions tending towards the low-end of the price range. Although some traders currently hold orders, many plan to wait for further price adjustments before executing purchases.

Magnesium alloy

prices

Today, the mainstream ex-factory price including tax for magnesium alloys in China is 17450-17650 yuan/mt; the FOB price for Chinese magnesium alloys is $2460-2500/mt.

Supply and demand

Last week, magnesium alloy prices were suppressed by the decline in magnesium ingot prices, as the surge in magnesium alloy demand could not offset the shortfall in magnesium ingot demand. Therefore, the decline in magnesium ingot prices far exceeded the increase in magnesium alloy processing fees, causing magnesium alloy prices to follow the downward trend of magnesium ingots. Supply and demand side, driven by previous end-use demand growth, the magnesium alloy market experienced a supply-demand imbalance, with most alloy producers operating on production schedules. As a result, magnesium alloy prices held up well, though the transaction range widened due to differences in order situations among alloy producers.

Magnesium Powder

Price

Today, the mainstream tax-inclusive ex-factory price for 20-80 mesh Chinese magnesium powder was 16,650-16,850 yuan/mt; the Chinese FOB price was $2,370-2,400/mt.

Supply and Demand

Last week, affected by declining raw material prices, magnesium powder prices accelerated their pullback. Current market transactions are primarily driven by rigid demand, with producers generally continuing the cautious strategy of producing based on sales. Since entering December, magnesium powder market supply saw a slight rebound, and some enterprises have successively purchased raw material magnesium ingots for restocking. Downstream procurement remains concentrated in rigid demand, while the overseas market mainly focuses on executing existing orders, with overall trading activity stable. Magnesium powder prices are expected to continue following the trend of raw material costs, maintaining a weak operating trend.