During the Pre-Holiday Period, the Magnesium Market Remained Stable, with Magnesium Ingot Prices Holding Steady in Major Production Areas. Overseas Inquiries Increased, but Trading Activity Was Sluggish [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 operated steadily this week. In terms of supply, top-tier enterprises in the Wutai area continued to halt production and sales, leading to a tight supply of high-quality sources within the region. However, other main producing areas promptly increased their output, effectively filling the local supply gap and ensuring stable dolomite supply. On the demand side, primary magnesium producers in Shaanxi, Shanxi, and Inner Mongolia maintained steady operations, orderly releasing rigid demand for dolomite. Most producers kept sufficient inventory, providing support for the stable operation of the market. Additionally, with the approaching Chinese New Year, logistics transportation demand increased, pushing up freight costs and raising the cost of dolomite delivered to factories. Considering the supply-demand pattern and cost factors, dolomite prices held up well.

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

This week, magnesium prices remained stable. As of the time of writing, the mainstream transaction prices for 99.90% magnesium ingot in the main production area were steady at 16,400 yuan/mt, unchanged WoW.

Domestic magnesium prices operated steadily this week. On the supply side, most primary magnesium smelters saw their financial pressures effectively alleviated, resulting in relatively small pressure on magnesium ingot shipments, and market quotations remained firm. On the demand side, downstream enterprises had largely completed pre-holiday stockpiling, shifting the mainstream transactions from spot purchases to futures. The atmosphere for spot trades was sluggish, and there was insufficient upward momentum for magnesium prices. Overall, the domestic magnesium market operated steadily this week.

1.2.2 Magnesium Ingot (Tianjin Port - China FOB)

This week, the China FOB price ranged from $2,320 to $2,380/mt, with an average of $2,350/mt. FOB prices remained stable along with ex-factory prices, and most Chinese traders suspended or quoted higher due to the approaching Chinese New Year holiday.

New orders in the overseas market were few this week. Although previously tendered orders have been gradually issued, the shipping schedules are generally arranged for mid-to-late March, focusing on future deliveries. Most of the orders received last year were shipped by the end of January to early February. This week, overseas clients showed increased inquiry activity, mainly concerning order expediting. However, due to the ongoing Chinese New Year holiday, logistics and foreign trade companies were mostly on break, making it difficult to advance actual transactions. The overall market trading was sluggish, with all parties adopting a wait-and-see attitude, awaiting clearer magnesium price trends after the holiday.

1.3 Magnesium Powder

This week, the mainstream ex-factory price (including tax) for 20-80 mesh Chinese magnesium powder was 17,550-17,750 yuan/mt; the China FOB price was $2,480-2,540/mt.

The magnesium powder market operated steadily overall this week. Supply side, magnesium powder producers largely completed pre-holiday stockpiling of raw material magnesium ingot, and the production pace gradually slowed down accordingly. Demand side, performance tended to be sluggish; domestic trade market procurement was nearly finished, stockpiling was largely completed, coupled with decreased logistics capacity, the overall transaction atmosphere cooled. Overseas market side, new orders this month were also relatively limited.

1.4 Magnesium Alloy

This week, the mainstream tax-inclusive ex-factory price for Chinese magnesium alloy was 18,600-18,800 yuan/mt, and the mainstream FOB price for Chinese magnesium alloy was $2,600-2,650/mt.

This week, both the magnesium alloy market benchmark price and processing fees remained stable. Cost side, the weekly average price of the main raw material, magnesium ingot, remained stable, while the price of auxiliary material A00 aluminum ingot fluctuated at highs, providing some support to costs. Supply and demand side, magnesium alloy producers operated normally, downstream die-casting and end-user enterprises gradually entered holiday shutdowns, and scattered order transactions were sluggish. Currently, magnesium alloy enterprises still primarily focus on scheduled production; the market supply-demand maintained a tight balance, providing strong support for processing fees. Magnesium alloy processing fees are expected to remain firm in the short term.

2 Weekly Summary

This week, China's magnesium industry chain market operated steadily overall. Affected by the approaching Chinese New Year, the market trading atmosphere gradually weakened, with participants generally adopting a wait-and-see attitude. The dolomite market was generally stable; shutdowns of top-tier enterprises in the Wutai area led to tight availability of high-quality material, but other main production areas promptly supplemented volume to fill the gap, ensuring stable supply. Stable operation of primary magnesium enterprises in Shaanxi, Shanxi, and Inner Mongolia brought rigid demand, coupled with rising pre-holiday freight pushing up costs, keeping prices relatively strong. The magnesium ingot market held steady; smelters in main production areas saw eased funding pressure and firm offers, downstream pre-holiday stockpiling concluded, and spot trades were relatively light; overseas new orders at the Tianjin Port FOB market were scarce, mostly for forward delivery, with the Chinese New Year holiday impacting the progress of actual transactions. Magnesium powder producers slowed their production pace after completing raw material stockpiling; procurement in both domestic and foreign trade neared completion, and the transaction atmosphere cooled. Magnesium alloy producers operated normally, downstream die-casting and end-user enterprises gradually entered holidays, orders were light, and the tight supply-demand balance supported firm processing fees.