Magnesium Market Stabilizes at 15,500 yuan/mt, Inventory Accumulation Poses Hidden Concern for Future Trends [SMM Magnesium Morning Meeting Summary]

SMM Magnesium Morning Meeting Minutes for December 16:

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 plants in the main production areas maintained stable production, continuously releasing rigid demand for dolomite, providing strong support. Dolomite prices are expected to hold up well. For the previous working day, the most-traded ferrosilicon futures contract, 2603, closed at 5,518, up 68. In the spot market, some ferrosilicon smelters recently underwent maintenance shutdowns due to losses, leading to a slight reduction in market supply. However, considering the current weak demand, the ferrosilicon market is characterized by weak supply and demand, and ferrosilicon prices are expected to consolidate at the bottom.

Magnesium Ingot

Today, the mainstream transaction price for magnesium ingots in the Fugu area was 15,450-15,550 yuan/mt, flat from the previous working day; the Chinese FOB price was quoted at $2,200-2,250/mt.

Supply and Demand

Yesterday morning, magnesium plants quoted prices firmly, with leading primary magnesium smelters showing strong sentiment to hold prices firm. However, downstream acceptance of high prices was low. Under inventory pressure, some magnesium plants pulled back their offers to 15,500 yuan/mt. According to SMM, the lowest transaction price for magnesium ingots from some Inner Mongolia producers was concluded at 15,400 yuan/mt, but high-quality, low-priced material was scarce. Overall, the magnesium market saw a strong stalemate atmosphere yesterday. Magnesium plants were increasingly reluctant to sell, while some downstream users entered the market to purchase opportunistically. The magnesium price stopped falling and stabilized at the 15,500 yuan/mt level. Looking ahead, considering the increasing inventory pressure in the magnesium market, magnesium prices are expected to remain under pressure.

Magnesium Alloy

Today, the mainstream tax-included ex-factory price for the Chinese magnesium alloy market was 17,450-17,650 yuan/mt; the Chinese FOB price for magnesium alloy was $2,460-2,500/mt.

Supply and Demand

Recently, magnesium alloy prices followed the downward trend of the raw material, magnesium ingot. On the supply-demand side, the magnesium alloy market experienced a supply-demand imbalance driven by previous growth in end-use demand. Most alloy plants were busy fulfilling orders, which supported stronger magnesium alloy prices. However, due to variations in order books among alloy plants, the transaction range for magnesium alloy widened.

Magnesium Powder

Price

Today, the mainstream tax-included 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

Yesterday, magnesium powder prices stabilized along with magnesium ingot prices, with limited availability of low-priced material in the market. The current transactions are still dominated by rigid demand, and producers generally maintain a cautious strategy of producing based on sales. Since the beginning of December, magnesium powder production has slightly rebounded, with some enterprises having successively purchased raw material magnesium ingots for restocking. Currently, many are waiting for further declines in raw material prices before entering the market to purchase. Downstream procurement continues to focus on rigid demand, and overall market trading remains stable. It is expected that magnesium powder prices will continue to follow the trend of raw material costs and remain in the doldrums.