Cost Support and Weak Demand in a Tug of War, Magnesium Prices Rose Then Fell [SMM Magnesium Weekly Review]

Published: May 28, 2026 16:16

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[SMM Magnesium Weekly Review: Cost Support vs. Weak Demand — Magnesium Prices Rose First Then Fell] Magnesium prices rose first then fell this week. At the beginning of the week, prices surged driven by rising coal costs, but later pulled back due to downstream resistance to high prices and sluggish transactions. Dolomite prices remained stable, while magnesium powder and magnesium alloys fluctuated in line with magnesium ingot prices. Export inquiries recovered but actual transactions remained low. In the short term, the market is expected to continue in the doldrums with range-bound fluctuations.

1 Market Review

1 Dolomite

This week, the ex-factory tax-exclusive price of 1-3 cm dolomite (Wutai) was 128 yuan/mt, up 20 yuan/mt WoW, and the ex-factory tax-exclusive price of 2-4 cm dolomite (Wutai) was 158 yuan/mt, up 20 yuan/mt WoW.

This week, China's dolomite ex-factory prices remained generally stable. In terms of supply, affected by environmental protection checks, mainstream stone quarries in Wutai, Shanxi suspended production again from May 1, reducing local premium supply. However, supply from Hubei, Inner Mongolia, Henan and other regions replenished in time, and overall spot cargo inventory remained ample. Demand side, primary magnesium enterprises in Shanxi and Shaanxi maintained high operating rates, providing strong rigid demand support; however, downstream enterprises had sufficient stockpiling and procurement was mainly limited to restocking on an as-needed basis. Considering overall supply-demand conditions, supply was locally tight, and dolomite prices are expected to continue running steadily going forward.

1.2 Magnesium Ingot

1.2.1 Magnesium Ingot (Fugu, Shenmu – Main Producing Areas)

This week, magnesium prices showed a pattern of initial strength followed by weakness. As of press time, mainstream quotations for 99.90% magnesium ingot in the main producing areas were 16,550-16,650 yuan/mt, up 250 yuan/mt WoW.

This week, China's magnesium metal market ran strong initially before weakening. At the beginning of the week upon market reopening, driven by a sharp rise in coal prices, primary magnesium smelting costs increased, and magnesium ingot prices briefly surged to 16,700 yuan/mt. However, downstream enterprises resisted high-priced raw materials and mostly adopted a wait-and-see approach on procurement, causing market transactions to cool rapidly. Against this backdrop, some producers cut prices to attract orders, and low-priced supply impacted the market, dragging down overall transaction expectations and reversing the earlier upward price trend. As of press time, some magnesium ingot quotations had pulled back to 16,500 yuan/mt. Overall, magnesium prices this week were constrained by both cost and demand factors. At present, coal prices fluctuate at highs, providing support to the floor of magnesium prices, but weak demand is unlikely to improve in the short term, limiting upside room. Magnesium market is expected to maintain a pattern of weak and range-bound fluctuations in the near term, with insufficient upward momentum. The market going forward should focus on coal price fluctuations and downstream concentrated restocking dynamics.

1.2.2 Magnesium Ingot (Tianjin Port – China FOB)

This week, China FOB prices were quoted at $2,350-2,410/mt, with an average of $2,380/mt. Magnesium ingot export market quotations rebounded slightly before pulling back to last weekend's level.

This week, supported by cost side factors, factory quotations were firm at the beginning of the week, and traders raised FOB quotations to $2,380-2,400/mt accordingly. However, magnesium prices held for only one day before starting to pull back. Mid-week, ex-China end-users initiated tenders, and the overall offer center shifted lower. Entering late May, both export inquiries and orders increased, and market trading was relatively active. As of Thursday, transaction prices remained concentrated in the $2,350-2,360/mt range.

1.3 Magnesium Powder

This week, the mainstream tax-inclusive ex-factory price of 20-80 mesh magnesium powder in China was 17,800-17,900 yuan/mt; the China FOB price was $2,490-2,590/mt.

This week, the magnesium powder market initially fluctuated at highs following magnesium ingot prices before pulling back to last week's level. In May, the operating rate on the magnesium powder supply side edged down, with expectations of further tightening ahead, mainly due to weak demand both domestically and internationally, with procurement limited to rigid demand. Magnesium powder prices are expected to move sideways in the near term, tracking magnesium ingot trends.

1.4 Magnesium Alloy

This week, the mainstream tax-inclusive ex-factory price of magnesium alloy in China was 18,650-18,950 yuan/mt, and the mainstream FOB price of China's magnesium alloy was $2,700-2,780/mt.

This week, magnesium alloy prices surged significantly following raw material magnesium ingot prices, while market transactions were lackluster. Supply side, magnesium alloy producers maintained stable operations, leading alloy enterprises had solid orders, and some producers saw slight inventory accumulation. Demand side performance was divergent, with orders varying across enterprises, and the price spread in the industry continued to widen. Among downstream end-users, demand from the NEV sector recovered steadily, while two-wheeled electric vehicle demand remained sluggish, and overall market demand support was insufficient. At present, the magnesium alloy market shows an oversupply pattern, with price trends tracking magnesium ingot movements.

2 Weekly Summary

This week, the magnesium market overall showed a pattern of initial strength followed by weakness. At the beginning of the week, rising coal prices pushed up smelting costs, and magnesium prices briefly surged. However, strong resistance sentiment among downstream buyers toward high prices led to a wait-and-see approach on procurement. After transactions cooled, some producers cut prices to attract orders, and prices retreated from highs. Dolomite supply tightened locally due to environmental protection impacts, but alternative supply replenished in time, and prices remained stable. Magnesium powder and magnesium alloy prices fluctuated in line with magnesium ingot, with divergent demand performance — the NEV sector recovered steadily while two-wheeled electric vehicles remained sluggish. Export market inquiries recovered somewhat, but the transaction center stayed low. Overall, cost support and weak demand continued to tug against each other, and the magnesium market is expected to maintain weak and range-bound operations in the near term.

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM's internal database model. They are for reference only and do not constitute decision-making recommendations.

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