Snowfall Stockpiling Boosts Short-Term Sentiment, While Export Transactions Remain Sluggish [SMM Magnesium Morning Meeting Minutes]

SMM Magnesium Morning Meeting Minutes for February 2:

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 5,850 yuan/mt.

Supply and Demand

Dolomite prices in Wutai 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 demand support from the current high operating rates of primary magnesium producers, dolomite prices are expected to hold up well. For ferrosilicon, the most-traded ferrosilicon futures contract 2603 closed at 5,660 yuan, down 52 yuan from the previous session. The futures market held up well yesterday. In the spot market, ferrosilicon supply remained stable, while downstream users maintained just-in-time procurement. Overall market activity was moderate. Future price trends will depend on the next round of steel mill pricing.

Magnesium Ingot

Prices

Today, the mainstream transaction price for magnesium ingot in the Fugu area was 16,600 yuan/mt, flat from the previous working day; the China FOB price was $2,360-2,410/mt.

Supply and Demand

Last week, magnesium prices continued to hold up well, with mainstream quotations concentrated in the range of 16,600-17,000 yuan/mt. Due to the cold air, the market anticipated rain and snow in the main production area later in the week, which could disrupt logistics. This prompted some downstream customers to engage in concentrated stockpiling mid-week, significantly increasing market inquiry activity. In foreign trade, inquiries increased, mostly for forward orders targeting Q2. However, actual transactions were still dominated by scattered orders, with transaction prices generally concentrated in the range of $2,320-2,340/mt. Overall, the magnesium market is expected to show a slightly weaker trend, as demand support remains insufficient.

Magnesium Alloy

Prices

Today, the mainstream tax-included ex-factory price for magnesium alloy in China was 18,850-19,050 yuan/mt; the China FOB price for magnesium alloy was $2,630-2,690/mt.

Supply and Demand

Last week, the magnesium alloy market exhibited a pattern of rising benchmark prices and stable processing fees. Cost side, the weekly average price of the main raw material, magnesium ingot, increased by 350 yuan/mt this week. Auxiliary materials side, the price of A00 aluminum ingot fluctuated at highs, while magnesium alloy processing fees remained firm. Supply-demand side, magnesium alloy producers operated stably this week. As the year-end approaches, some die-casting manufacturers and end-users are nearing the Chinese New Year break, leading to a slight reduction in orders. Overall, the magnesium alloy market is expected to maintain a tight balance, with processing fees remaining firm.

Magnesium Powder

Price

Today, the mainstream ex-factory price, including tax, for 20-80 mesh magnesium powder in China was 17,800-18,000 yuan/mt; the FOB price in China was $2,520-2,570/mt.

Supply and Demand

Last week, the magnesium powder market operated steadily overall, with smooth execution of the industry's production schedule. Demand side, the domestic trade market maintained a purchasing-as-needed pattern, while new foreign trade orders were generally limited. Driven by the slight increase in the price of raw material magnesium ingots since Tuesday, the production cost of magnesium powder rose accordingly, leading to a mild raise in market quotations.