Magnesium Market Experiences Supply-Demand Divergence at Year-End, Alloys Strengthen While Magnesium Ingots Under Pressure [SMM Magnesium Morning Meeting Minutes]

SMM Magnesium Morning Meeting Minutes for December 29:

Magnesium Raw Materials

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. Production order at magnesium plants in the main production area remained stable, with sustained release of rigid demand for dolomite providing strong support. Dolomite prices are expected to hold up well. For ferrosilicon, the most-traded futures contract, si2603, closed at 5,672 on the previous working day, up 10. In the spot market, ferrosilicon faced oversupply amid weak demand. Coupled with the ongoing industry off-season, upward momentum in the ferrosilicon market is expected to be limited in the short term.

Magnesium Ingot

Prices

Today, mainstream quotations for magnesium ingot in Fugu were 15,650-15,700 yuan/mt, flat from the previous working day. The Chinese FOB price was $2,200-2,280/mt.

Supply and Demand

After holding firm early last week, magnesium prices dropped back slightly. Supply side remained stable, with the weekly operating rate of magnesium plants maintaining a high level of 76.7%. However, sentiment on the demand side was bearish, as traders had largely completed their earlier stockpiling and current procurement was mainly for rigid needs. The overall market still showed an oversupply pattern. New foreign trade orders were basically stagnant due to the holiday impact. Combined with significant inventory pressure on the supply side, the magnesium market is expected to remain in the doldrums this week.

Magnesium Alloy

Prices

Today, the mainstream tax-included ex-factory price for magnesium alloy in China was 17,750-17,950 yuan/mt. The Chinese FOB price for magnesium alloy was $2,470-2,520/mt.

Supply and Demand

Magnesium alloy prices held up well last week. On the supply-demand front, supply side, operating rates for magnesium alloy in Anhui, Shanxi, Shaanxi, and other regions were strong. However, some magnesium alloy enterprises had orders scheduled until February, leading to relatively tight spot supply in the market. Spot magnesium alloy was in an undersupply situation. Affected by this, magnesium alloy processing fees rose steadily. Cost side, raw material magnesium ingot prices fluctuated rangebound, with the benchmark price edging up. Overall, the current tight balance in the magnesium alloy market is difficult to reverse in the short term, and magnesium alloy prices are expected to hold up well in the near term.

Magnesium Powder

Prices

Today, the mainstream tax-included ex-factory price for 20-80 mesh magnesium powder in China was 16,800-17,000 yuan/mt. The Chinese FOB price for magnesium powder was $2,370-2,430/mt.

Supply-Demand

Last week, magnesium powder market transactions remained generally stable. Domestic trade demand continued the purchasing-as-needed pattern, while foreign trade orders were largely finalized. Currently, magnesium powder producers are generally in a state of stockpiling. On the supply side, the sales-based production strategy continued, and the enthusiasm for purchasing raw material magnesium ingots has recently increased. It is expected that, supported by raw material costs, magnesium powder prices will continue to maintain stable operation.