Intensified Tug-of-War Between Sellers and Buyers in the Magnesium Market, Magnesium Ingot Decline Unabated, Magnesium Alloy Diverges in Operation [SMM Magnesium Morning Meeting Minutes]

SMM January 20 Magnesium Morning Meeting Minutes:

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 5,800 yuan/mt.

Supply and Demand

Wutai dolomite prices held steady yesterday. Recently, leading dolomite producers in Wutai confirmed production halts, reducing the supply of high-quality dolomite in the market. Considering the strong support from high operating rates at primary magnesium plants for dolomite demand, dolomite prices are expected to hold up well. The most-traded ferrosilicon futures contract, 2603, closed at 5,548 yuan yesterday, down 44 yuan. In the spot market, ferrosilicon supply remained stable, with producers holding firm on offers. Downstream buyers exhibited strong wait-and-see sentiment, resulting in sluggish market transactions. Ferrosilicon prices are expected to remain in the doldrums.

Magnesium Ingot

Today, the mainstream transaction price for magnesium ingot in the Fugu area is expected to be 16,200 yuan/mt, down 150 yuan/mt from the previous working day; the Chinese FOB price was quoted at $2,320-2,380/mt.

Supply and Demand

The decline in magnesium prices accelerated yesterday. Although leading producers held firm on offers with low willingness to sell, small and medium-sized primary magnesium smelters reduced prices to stimulate transactions and expedite sales. The mainstream transaction price fell to 16,100-16,200 yuan/mt yesterday, with market prices declining rapidly. Influenced by the sentiment of rushing to buy amid continuous price rise and holding back amid price downturn, downstream buyers mainly made just-in-time procurement, and market transactions remained limited to essential demand.

Magnesium Alloy

Today, the mainstream tax-included ex-factory price for magnesium alloy in China is 18,550-18,750 yuan/mt; the Chinese FOB price for magnesium alloy is $2,610-2,660/mt.

Supply and Demand

Magnesium alloy prices held steady yesterday. Specifically, cost side, the price of the raw material magnesium ingot was in the doldrums, leading to a gradual decline in the magnesium alloy benchmark price. However, A00 aluminum prices fluctuating at highs pushed up auxiliary material costs, resulting in a slight rise in the transaction price for magnesium alloy processing fees at the beginning of the month. Supply-demand side, the operating rate at leading magnesium alloy enterprises remained stable, and magnesium alloy production in Shaanxi increased slightly. However, spot supply in the market remained tight. Magnesium alloy prices are subsequently expected to show a trend of a gradually declining benchmark price while processing fees hold up well.

Magnesium Powder

Price

Today, the mainstream tax-included ex-factory price for 20-80 mesh magnesium powder in China is 17,500-17,700 yuan/mt; the Chinese FOB price is $2,490-2,530/mt.

Supply and Demand

The magnesium powder market overall held steady yesterday, but influenced by the price correction of upstream raw materials, magnesium powder prices continued to fall. Some producers have started purchasing raw materials to replenish inventory. Demand side, current new orders are limited, and overall demand is expected to remain predominantly rigid, with a lack of significant growth momentum in the short term.