Magnesium Market Sees Strong Holding Sentiment, Downstream Restocking Drives Prices Higher [SMM Magnesium Morning Meeting Minutes]

SMM December 22 Magnesium Morning Meeting Minutes:

Magnesium Raw Material

Prices

The ex-factory, tax-excluded price for 1-3 cm dolomite (Wutai) was 108 yuan/mt, flat from the previous working day; the ex-factory, tax-excluded price 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-Demand

Recently, Wutai dolomite prices held steady. Magnesium plants in the main production area operated stably, with sustained release of rigid demand for dolomite providing strong support. Dolomite prices were expected to hold up well. On the previous working day, the most-traded ferrosilicon futures contract 2603 closed at 5,640, up 46. Ferrosilicon futures fluctuated upward. In the spot market, two ferrosilicon plants in Gansu switched production recently, leading to a continued reduction in the supply of standard ferrosilicon. The fundamentals of ferrosilicon improved, and the ferrosilicon market was expected to hold up well in the short term.

Magnesium Ingot

Today, the mainstream transaction price for magnesium ingots in Fugu was 15,650 yuan/mt, flat from the previous working day; the China FOB price was quoted at $2,200-2,260/mt.

Supply-Demand

Last week, magnesium prices fluctuated rangebound. At the start of the week, magnesium plants were reluctant to sell, and prices held firm. Some downstream users, considering that prices had fallen to their psychological price level, entered the market to restock collectively, resulting in strong market transactions. Supported by transactions, magnesium plants tentatively raised their offers. Some downstream users continued to restock based on rigid demand, pushing prices higher successively. Reviewing the magnesium market for the week, purchases for magnesium powder and foreign trade orders depleted the inventories of small primary magnesium smelters. Inventories of primary magnesium in the main production area showed a pattern of inventory buildup at large plants and zero inventory at small plants, which effectively reduced resistance to price increases.

Magnesium Alloy

Today, the mainstream tax-included ex-factory price for magnesium alloy in China was 17,600-17,800 yuan/mt; the China FOB price for magnesium alloy was $2,460-2,520/mt.

Supply-Demand

Last week, magnesium alloy prices held up well. Cost side, magnesium ingot prices, supported by demand, held up well, with the benchmark price slightly raised WoW. Supply-demand side, supply side, the magnesium alloy market experienced tight spot supply overall. Specifically, plants in Anhui and Shanxi operated at full capacity, while magnesium alloy production in Shaanxi rose rapidly, effectively filling the supply gap in the magnesium alloy market. Demand side, orders in the two-wheeled EV sector grew rapidly, coupled with stable demand release from the NEV sector, resulting in good magnesium alloy demand. Overall, the magnesium alloy market remained in a tight balance this week. Magnesium alloy processing fees were quoted firmly, and supported by raw material magnesium ingot prices, magnesium alloy prices held up well.

Magnesium Powder

Price

Today, the mainstream ex-factory prices including tax for 20-80 mesh magnesium powder in China were 16,800-17,000 yuan/mt; the FOB price in China was $2,370-2,420/mt.

Supply and Demand

Last week, magnesium powder prices were supported by raw material costs, remaining generally stable with a slight upward trend, but end-user demand continued to be dominated by rigid procurement. On the production side, producers mainly executed previous orders, and enterprises generally continued the sales-based production strategy, with the overall operating rate maintained at around 50%. According to the SMM survey, at the beginning of last week, magnesium powder producers conducted concentrated procurement of raw material magnesium ingots in the market, with purchase prices mostly at the lower end of the quotation range, primarily to meet the needs of existing order production. Overall, the magnesium powder market remained in the doldrums.