Post-Holiday Magnesium Market Showed Weak Consolidation, Supply and Demand Both Weak with Prices Under Pressure [SMM Magnesium Weekly Review]

1 Market Review

1 Dolomite

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

This week, China's dolomite market performed steadily overall, with relatively small price changes. Affected by the continued production suspension at Wutai mining areas, local supply remained tight, with the market gap mainly filled by inflows from Hubei, the Wenxi area, Henan, and Inner Mongolia. Downstream primary magnesium smelters steadily increased operating loads, and just-in-time procurement volumes rose, forming strong bottom support for the dolomite market. Meanwhile, international oil prices fluctuated at highs, pushing up logistics freight rates, with transportation costs remaining under pressure, driving delivery-to-factory prices to consolidate at highs this week, while ex-factory prices remained largely stable.

1.2 Magnesium Ingot

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

This week, magnesium prices were in the doldrums. As of press time, mainstream quotations for 99.90% magnesium ingot in the main production areas were 16,550-16,650 yuan/mt, basically flat WoW.

This week, magnesium prices overall fell. Supply side, primary magnesium smelters saw slight inventory buildup during the Labour Day holiday, with some producers showing stronger willingness to sell and more low-priced cargoes appearing in the market. Demand side, downstream enterprises had stockpiled sufficiently before the holiday, and post-holiday restocking purchase willingness was weak, with overall market trading atmosphere being sluggish. Overall, the current magnesium market showed weakness on both supply and demand sides, with quotations remaining in the doldrums.

1.2.2 Magnesium Ingot (Tianjin Port - China FOB)

This week, China FOB prices were quoted at $2,380-2,450/mt, with an average of $2,420/mt. After the Labour Day holiday, market inquiries were sluggish, and FOB prices edged down slightly.

This week, the magnesium ingot export market demand remained in the doldrums. New orders were insufficient, overall market quotations were sluggish, and the transaction center shifted toward the lower end. Affected by the weak consolidation of magnesium ingot ex-factory prices this week, FOB quotations slipped slightly.

1.3 Magnesium Powder

This week, mainstream tax-inclusive ex-factory prices of 20-80 mesh magnesium powder in China were 17,750-17,850 yuan/mt; China FOB prices were $2,530-2,630/mt.

This week, the magnesium powder market remained stable overall. Q2 orders for magnesium powder enterprises were in good condition, with export orders having been procured successively in Q1, and enterprises still in the stockpiling stage. Domestic trade demand was generally stable, with producers mostly maintaining produce based on demand. Recently, raw material magnesium ingot inventory stockpiling was relatively sufficient, and enterprise procurement sentiment turned wait-and-see. The stable magnesium ingot prices this week further reinforced this mentality. Magnesium powder prices are expected to move sideways in the short term, following the raw material market.

1.4 Magnesium Alloy

This week, mainstream tax-inclusive ex-factory prices of magnesium alloy in China were 18,700-18,900 yuan/mt, and mainstream FOB prices of China magnesium alloy were $2,750-2,830/mt.

This week, the magnesium alloy market remained stable overall, with raw material magnesium ingot and alloy processing fees in the doldrums. Supply side, alloy enterprises maintained stable operating loads, with normal supply release pace, and some producers kept moderate standing inventory, with overall supply being ample. Demand side, downstream die-casting enterprises gradually resumed production after the holiday, but the industry's wait-and-see atmosphere was heavy, with actual purchase willingness being weak and spot cargo transactions following weakly. At present, the market overall showed a pattern of strong supply and weak demand, alloy processing fees remained firm, and price trends moved in tandem with magnesium ingot futures, with short-term market likely to move sideways.

2 Weekly Summary

This week, the magnesium industry chain was overall in the doldrums. Dolomite prices remained stable, with delivery-to-factory prices consolidating at highs. Magnesium ingot quotations fell, affected by weak post-holiday restocking and increased low-priced cargoes, with FOB prices slipping slightly in tandem. Magnesium powder and magnesium alloy markets remained stable, with processing fees staying firm, but downstream procurement was in wait-and-see mode, with the overall market showing a pattern of strong supply and weak demand. Short-term magnesium prices are likely to continue to move sideways.