The Magnesium Market Is Under Pressure Across the Board, with Tightening Raw Material Supply and Sluggish Demand Interwoven [SMM Magnesium Morning Meeting Minutes]

SMM February 4 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 5,850 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 current high operating rates of primary magnesium producers, 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 5,620 yuan, down 40 yuan. In the spot market, ferrosilicon enterprises maintained normal production schedules, downstream users continued just-in-time procurement, traders operated cautiously, and market activity remained at a neutral level. 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 16,400-16,500 yuan/mt, down 150 yuan/mt from the previous working day; the Chinese FOB price was $2,330-2,390/mt.

Supply and Demand

The magnesium market remained in the doldrums yesterday, with mainstream transaction prices concentrated around 16,400 yuan/mt. According to an SMM survey, some small factories offered futures prices around 16,200 yuan/mt, and some magnesium powder plants made purchases around 16,300 yuan/mt. Overall market transactions were sluggish, with downstream users generally adopting a wait-and-see attitude. On the export front, delivery was mainly focused on previous orders, with few new orders signed. Market attention is largely concentrated on Q2 order negotiations. Overall, the magnesium market is expected to remain weak this week.

Magnesium Alloy

Prices

Today, the mainstream tax-included ex-factory price for magnesium alloy in China was 18,650-18,850 yuan/mt; the Chinese FOB price for magnesium alloy was $2,630-2,660/mt.

Supply and Demand

Yesterday, the magnesium alloy market saw the benchmark price under pressure while processing fees held steady. On the cost side, the transaction center for magnesium ingot shifted downward, and the benchmark price declined. In auxiliary materials, the price of A00 aluminum ingot fell from high levels, narrowing magnesium alloy processing costs. However, magnesium alloy producers mainly adopted a wait-and-see stance, and processing fees remained stable. Supply and demand side, magnesium alloy producers operated stably. As the year-end approached, some die-casting plants and end-users were nearing the Chinese New Year break, leading to a slight decrease in orders. Overall, the magnesium alloy market maintained a tight balance, with alloy processing fees holding firm.

Magnesium Powder

Price

Today, the mainstream tax-inclusive ex-factory price for 20-80 mesh Chinese magnesium powder was 17,600-17,800 yuan/mt; the FOB China price was $2,490-2,550/mt.

Supply-Demand

The magnesium powder market remained generally stable yesterday, but the price center edged down due to lower raw material costs. On the supply side, some enterprises entered the market to purchase magnesium ingots to replenish raw material inventory. Demand side performance remained mediocre, with domestic trade maintaining a purchasing-as-needed pace, and new order bookings in the foreign trade sector were also relatively limited.