Magnesium Market Overall Shows Stable with Weakening Trend, Game Between Supply Under Pressure and Demand Wait-and-See Continues [SMM Magnesium Morning Meeting Minutes]

SMM January 19 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 5,800 yuan/mt.

Supply and Demand

Last week, Wutai dolomite prices held steady. Recently, leading dolomite manufacturers in Wutai confirmed production halts, reducing the supply of high-quality dolomite in the market. Considering the strong support for dolomite demand from the current high operating rates of primary magnesium producers, dolomite prices were expected to hold up well. In the previous working day, the most-traded ferrosilicon futures contract, si2603, closed at 5,570 yuan, down 72 yuan. In the spot market, ferrosilicon supply remained stable, with producers holding firm on their offers. Downstream, wait-and-see sentiment was strong, resulting in sluggish market transactions. Ferrosilicon prices were expected to remain in the doldrums.

Magnesium Ingot

Prices

Today, the mainstream transaction price for magnesium ingots in the Fugu area was expected to be 16,300-16,400 yuan/mt, down 150 yuan/mt from the previous working day; the China FOB price was quoted at $2,340-2,410/mt.

Supply and Demand

Last week, market transactions were primarily just-in-time procurement. The decline in the mainstream transaction price for magnesium ingots in major production areas gradually accelerated. However, some leading producers showed limited willingness to sell, with their offers still holding firm at 16,800 yuan. Overall, the market presented a pattern of chaotic offers and a widening spread between transaction prices and offers. In the foreign trade market, FOB offers showed signs of softening, generally concentrated in the $2,350-2,400/mt range. Some low-priced sources might have originated from previously accumulated low-cost inventory. Overall, the sluggish trend in foreign trade market transactions was expected to continue.

Magnesium Alloy

Prices

Today, the mainstream tax-included ex-factory price for magnesium alloy in China was 18,800-19,000 yuan/mt; the China FOB price for magnesium alloy was $2,650-2,710/mt.

Supply and Demand

Last week, magnesium alloy prices held steady. Specifically, on the cost side, raw material magnesium ingot prices were in the doldrums, and the benchmark price for magnesium alloy showed a slight downward trend. However, pushed by A00 aluminum prices fluctuating at highs, which increased auxiliary material costs, the transaction price for magnesium alloy processing fees saw a slight rise at the beginning of the month. On the supply-demand side, the operating rate of leading magnesium alloy enterprises remained stable, and magnesium alloy production in Shaanxi saw a slight increase. However, spot supply in the market remained tight. Magnesium alloy prices were expected to show a trend of a slightly declining benchmark price with processing fees holding up well.

Magnesium Powder

Price

Today, the mainstream ex-factory price, including tax, for 20-80 mesh magnesium powder in China was 17,650-17,850 yuan/mt; the FOB price in China was $2,510-2,560/mt.

Supply and Demand

Last week, the magnesium powder market trended steadily. Affected by the pullback in raw material prices, magnesium powder prices also showed signs of softening. The industry operating rate remained stable for three consecutive months, and enterprises generally continued the sales-based production strategy. Some producers recently entered the market to purchase raw materials to replenish inventory. Demand side, overall demand was still expected to be dominated by rigid demand, lacking significant growth momentum in the short term.