Magnesium Market Fluctuates Rangebound, Inventory Gradually Declines Amid Cost-Demand Tug-of-War [SMM Magnesium Weekly Review]

1 Market Review

1 Dolomite

This week, the ex-factory price (excluding tax) of 1-3 cm dolomite (Wutai) was 108 yuan/mt, unchanged WoW, and the ex-factory price (excluding tax) of 2-4 cm dolomite (Wutai) was 138 yuan/mt, also unchanged WoW.

The domestic dolomite market remained stable this week. Supply side, leading producers in Wutai continued to halt production and sales, tightening the supply of high-quality sources, while other producing areas promptly filled the market gap; demand side, primary magnesium enterprises in Shaanxi, Shanxi, and Inner Mongolia operated steadily, with rigid demand being released in an orderly manner, and most manufacturers had sufficient inventory. Overall, affected by the tight supply in Wutai, local dolomite prices are expected to hold up well, while other regions will remain stable.

1.2 Magnesium Ingot

1.2.1 Magnesium Ingot (Fugu, Shenmu - Main Production Area)

This week, magnesium prices first strengthened then weakened. As of the time of writing, the mainstream transaction prices for 99.90% magnesium ingot in the main production area rose to 16,300 yuan/mt, a decrease of 300 yuan/mt from last Thursday.

This week, magnesium prices showed a pattern of initial strength followed by weakness, fluctuating rangebound. At the beginning of the week, the magnesium market continued the downward trend from the previous week, with magnesium prices dropping by 150 yuan/mt per day. As magnesium prices fell below 16,500 yuan/mt, market inquiries increased slightly, and there were occasional large transactions, with some manufacturers' inventories noticeably reduced. By mid-week, magnesium prices rebounded above the 16,000 yuan/mt mark, and procurement enthusiasm significantly increased, causing magnesium prices to bottom out, with domestic 99.90% magnesium ingot prices rising to 16,000 yuan/mt. Overall, with stable supply this week, increased downstream procurement volume led to a decline in magnesium plant inventories, and under the support of producers' reluctance to sell, magnesium prices rebounded slightly.

1.2.2 Magnesium Ingot (Tianjin Port - China FOB)

This week, the China FOB price was $2,300-2,380/mt, averaging $2,340/mt. The FOB price this week showed a trend of first declining then increasing, influenced by factory prices.

The overseas market maintained a sluggish trend this week, with very limited new orders. Due to the continuous decline in magnesium prices, overseas downstream buyers mainly inquired about prices and market conditions, showing weak willingness to place actual orders, with a "rush to buy amid continuous price rise and hold back amid price downturn" mentality prevailing. Traders, holding some low-priced stocks accumulated earlier, focused on executing existing orders this month. Facing the fluctuating trend and minor rebounds within the cycle, traders generally adopted a wait-and-see attitude, with low expectations for further price increases, and it is expected that prices will continue to fluctuate slightly in the short term.

1.3 Magnesium Powder

This week, the mainstream ex-factory price (including tax) for 20-80 mesh Chinese magnesium powder was 17,450-17,650 yuan/mt; the China FOB price was $2,470-2,530/mt.

This week, magnesium powder prices continued to be affected by the decline in raw material prices, showing an overall downward trend, with the decline stabilizing after a temporary pause mid-week. Current magnesium powder market transactions primarily rely on the execution of previous orders, with overall low enthusiasm for raw material procurement. Looking back at 2025 export performance, the magnesium powder export market experienced some contraction, and overall demand still awaits recovery. Magnesium powder prices are expected to operate stably in 2026, with limited significant upward drivers in the short term.

1.4 Magnesium Alloy

This week, the mainstream tax-inclusive ex-factory price for Chinese magnesium alloy was 18,500-18,700 yuan/mt, and the mainstream FOB price for Chinese magnesium alloy was $2,590-$2,650/mt.

This week, magnesium alloy exhibited a pattern of declining base prices alongside firm processing fees. Cost side, the weekly average price of the main raw material, magnesium ingot, declined slightly WoW, down 300 yuan/mt. Auxiliary materials side, the price of A00 aluminum ingot fell below 24,000 yuan/mt, narrowing auxiliary material costs, but A00 aluminum ingot prices remained high, and processing fees saw no significant adjustments. Supply and demand side, magnesium alloy producers operated stably this week; currently approaching year-end, some die-casting plants and end-users are nearing the Chinese New Year break, leading to a slight reduction in orders. Affected by this, magnesium alloy producers have paused capacity expansion plans. Overall, the magnesium alloy market is expected to maintain a tight balance, with magnesium alloy processing fees.

2 Weekly Summary

 This week, the magnesium industry chain overall presented a narrow-range fluctuation pattern amid a tug-of-war between sellers and buyers. Upstream, the dolomite market is expected to see firm prices due to persistent tightness of high-quality resources in Wutai, while supply from other production areas remained stable. Magnesium ingot prices fell first then rose, with the transaction price for 99.90% magnesium ingot in main production areas dropping initially before rebounding to 16,300 yuan/mt, down 300 yuan WoW, primarily supported by downstream buying the dip, reduced producer inventory, and a reluctance to sell. Overseas FOB quotations fluctuated similarly, but the overseas market was overall sluggish, with traders exhibiting a strong wait-and-see sentiment. Magnesium powder prices remained weak, influenced by falling raw material costs, with demand side focused on executing previous orders and purchase willingness remaining low. Magnesium alloy showed a divergent trend of "declining base prices but firm processing fees"; cost side, fluctuations in magnesium ingot and aluminum prices squeezed profit margins, while processing fees found support under the tight supply-demand balance. Overall, the market repeatedly wrestled between cost support and weak demand, exhibiting characteristics of structural divergence and consolidation.