Magnesium Market Prices Generally Strengthen, Sentiment-Driven Rise Sustainability Awaits Observation [SMM Magnesium Morning Meeting Minutes]

SMM January 6 Magnesium Morning Meeting Minutes:

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-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 continue holding up well. For ferrosilicon, the most-traded ferrosilicon futures contract, 2603, closed at 5,624 on the previous working day, down 78. In the spot market, HBIS's tender price for 75B ferrosilicon in January was set at 5,760 yuan/mt, up 100 yuan/mt MoM. Transaction-wise, market demand showed mediocre performance. Supported by costs, ferrosilicon prices held steady.

Magnesium Ingot

Prices

Today, the mainstream transaction price for magnesium ingots in the Fugu area was 16,000-16,100 yuan/mt, up 300 yuan/mt from the previous working day; the China FOB price was quoted at $2,260-2,340/mt.

Supply-Demand

The magnesium ingot market continued its strong performance yesterday. Producers held firm offers, while some buyers actively engaged in essential stockpiling, significantly boosting market transaction activity. Magnesium prices showed a stepwise rise, with transactions commonly occurring at 16,000 yuan/mt in the morning, gradually pushing up to 16,100 yuan/mt and 16,200 yuan/mt, with some enterprises raising their offers to 16,300 yuan/mt. According to SMM survey analysis, the price increase was mainly driven by market sentiment, indicating some overheating. From a fundamental supply-demand perspective, magnesium producer inventory has accumulated noticeably, operating rates remain high, and overall demand is still primarily rigid, lacking support for sustained, substantial increases. Prices are expected to have limited further upside room in the short term.

Magnesium Alloy

Prices

Today, the mainstream tax-included ex-factory price for magnesium alloy in China was 18,100-18,300 yuan/mt; the China FOB price for magnesium alloy was $2,530-2,580/mt.

Supply-Demand

Magnesium alloy prices held up well recently. On the raw material side, magnesium ingot prices continued to rise, steadily pushing up the benchmark price for magnesium alloy. Additionally, A00 aluminum prices increased by 850 yuan/mt, leading to a slight increase in the theoretical cost of aluminum-rich magnesium alloys like AZ91D. On the supply side, producers operated at full capacity, mostly following order-based production schedules, keeping market supply tight. On the demand side, downstream transactions followed steadily. Overall, magnesium alloy prices are expected to hold up well.

Magnesium Powder

Prices

Today, the mainstream ex-factory price, including tax, for 20-80 mesh Chinese magnesium powder was 17,200-17,400 yuan/mt; the Chinese FOB price was $2,420-2,500/mt.

Supply and Demand

Trading in the magnesium powder market was generally stable. On the demand side, recent orders were active, with year-end concentrated order releases prompting magnesium powder producers to generally enter a stockpiling phase. On the supply side, they continued to implement a sales-based production strategy, and purchase willingness for the raw material magnesium ingot increased. Supported by raw material costs, magnesium powder prices are expected to remain stable.