Resonance Between Reluctance to Sell and Firm Price Holding and Stockpiling Demand: Sustainability of Magnesium Price Rebound Awaits Observation [SMM Magnesium Morning Meeting Minutes]

SMM January 26 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 5,850 yuan/mt.

Supply-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 current high operating rates at primary magnesium plants, which provide strong support for dolomite demand, dolomite prices are expected to hold up well. In the previous working day, the most-traded ferrosilicon futures contract 2603 closed at 5,604 yuan, down 56 yuan. In the spot market, ferrosilicon supply remained stable, downstream consumers maintained just-in-time procurement, and overall market trading activity was moderate. Ferrosilicon prices are expected to fluctuate rangebound.

Magnesium Ingot

Today, the mainstream transaction price for magnesium ingots in the Fugu area was 16,500 yuan/mt, up 200 yuan/mt from the previous working day; the China FOB price was $2,300-2,380/mt.

Supply-Demand

Magnesium prices held up well yesterday. Primary magnesium smelters in the main production area quoted firm prices yesterday, with producers showing strong reluctance to sell. Additionally, anticipated future rain and snow are expected to increase transportation difficulties, prompting some downstream procurement agents to enter the market early for stockpiling. Market transactions improved slightly, and magnesium prices rose steadily. However, transaction volume at the current high price level was insufficient. Whether the price increase can be sustained remains to be tested by the market. SMM will closely follow the recent magnesium market developments.

Magnesium Alloy

Today, the mainstream tax-included ex-factory price for magnesium alloy in China was 18,500-18,700 yuan/mt; the China FOB price for magnesium alloy was $2,590-2,650/mt.

Supply-Demand

Magnesium alloy prices followed magnesium prices higher yesterday. Cost side, magnesium ingot prices were raised slightly yesterday, with the benchmark price up 200 yuan/mt MoM from the day before. Other auxiliary material prices hovered at highs, with relatively small fluctuations. Supply-demand side, leading magnesium alloy producers maintained production based on existing orders, and spot cargo in the market was relatively tight. Processing fees are expected to hold firm.

Magnesium Powder

Prices

Today, the mainstream tax-included ex-factory price for 20-80 mesh magnesium powder in China was 17,450-17,650 yuan/mt; the China FOB price was $2,470-2,530/mt.

Supply-Demand

The magnesium powder market performed steadily overall yesterday. Industry production schedules ran relatively smoothly this month. Demand side, the domestic trade market maintained a purchasing-as-needed pace, while the number of new orders in the foreign trade market was limited overall. Driven by the slight increase in the price of raw material magnesium ingot yesterday, the production cost of magnesium powder has risen, and market offers have been raised slightly accordingly.