Limited Support from Raw Material Side, Magnesium Products Overall in the Doldrums This Week [SMM Magnesium Weekly Review]

1 Market Review

1 Dolomite

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

This week, China's dolomite ex-factory quotations remained generally stable. Supply side, affected by environmental protection inspection disruptions, leading stone quarries in the Wutai area of Shanxi suspended production again from May 1, tightening the supply of high-grade raw materials in the region; however, supplies from Hubei, Inner Mongolia, and Henan continued to flow out to fill the gap, and overall spot inventory nationwide remained at an ample level. Demand side, primary magnesium smelters in the Shanxi-Shaanxi region maintained high operating rates, with just-in-time procurement underpinning raw material purchases; however, downstream enterprises had completed earlier stockpiling, and the market mostly made sporadic purchases on demand, with weak willingness for bulk purchasing. Overall supply-demand pattern, only localized supply tightness existed in the industry, and dolomite prices were likely to remain stable in the short term.

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

This week, magnesium prices were in the doldrums. As of press time, mainstream quotations for 99.90% magnesium ingot in the main producing areas were 16,300-16,400 yuan/mt, down 250 yuan/mt WoW.

This week, China's magnesium ingot market was in the doldrums. At the beginning of the week when the market resumed, affected by fear of high prices, primary magnesium smelters and traders successively sold at lower prices, and magnesium prices showed a gradual decline. After magnesium prices approached the 16,300 yuan/mt threshold again, market trading sentiment shifted notably. Primary magnesium producers increasingly held back from selling, available low-priced spot cargo in the market gradually diminished, and mainstream transaction prices anchored around the 16,300 yuan/mt range. The downside room for magnesium prices continued to narrow, and the market overall showed signs of consolidating at lows and stabilizing. Downstream enterprises carried out restocking operations based on their own production needs, the trading atmosphere in the spot market steadily improved, and primary magnesium prices maintained a stable trend.

1.2.2 Magnesium Ingot (Tianjin Port - China FOB)

This week, China FOB prices were quoted at $2,330-2,400/mt, with an average of $2,365/mt. This week, magnesium ingot export market quotations were generally slightly lower, but remained relatively stable as ex-factory prices held steady.

This week, factory quotations stabilized at 16,300 yuan/mt after edging down. The export market continued to be sluggish. The decline in ex-factory prices actually triggered traders' concerns about future price increases, fearing potential losses after quoting low prices, so quotations were relatively cautious. This week, FOB quotations were mostly concentrated in the $2,350-2,380/mt range. Overall transactions were weak, as overseas end-users maintained a wait-and-see attitude, waiting for prices to pull back further before considering placing orders.

1.3 Magnesium Powder

This week, mainstream tax-inclusive ex-factory prices of 20-80 mesh China magnesium powder were 17,750-17,650 yuan/mt; China FOB prices were $2,475-2,575/mt.

This week, the magnesium powder market stabilized after pulling back in line with magnesium ingot prices. Affected by the outflow of low-priced raw materials, magnesium powder prices were generally running at low levels. Currently in the demand off-season, the market was dominated by just-in-time procurement, and export orders also showed a weakening trend.

1.4 Magnesium Alloy

This week, mainstream tax-inclusive ex-factory prices of China magnesium alloy were 18,400-18,600 yuan/mt, and mainstream FOB prices of China magnesium alloy were $2,675-2,755/mt.

This week, magnesium alloy prices were in the doldrums following the weakness in raw material magnesium ingot prices, while market transactions progressed steadily. Supply side, magnesium alloy smelter operating rates edged up slightly in May, with most magnesium alloy smelters maintaining a dynamic production-sales balance, and inventory at some magnesium alloy smelters rose slightly; demand side, magnesium alloy orders from automotive die-casting plants were released steadily, while orders from two-wheeler die-casting plants remained sluggish. Overall, the current magnesium alloy market was in oversupply, and some producers lowered processing fees to stimulate transactions under inventory pressure, with market processing fees trending downward.

2 Weekly Summary

This week, all products along the industry chain tracked magnesium ingot's weak consolidation. Dolomite supplies were replenished sufficiently across regions; localized raw material tightness existed but overall inventory was ample, and ex-factory prices remained stable. Magnesium ingot in the main producing areas first declined then stabilized during the week, with quotations down 250 yuan/mt on a weekly basis; producers holding back from selling at low levels supported the market to stop falling, and downstream made restocking on demand. Tianjin port export quotations saw limited fluctuations, with overseas wait-and-see sentiment leading to sluggish transactions. Magnesium powder stabilized after declining with raw materials, with both domestic and external demand in the off-season relying on just-in-time procurement. Magnesium alloy weakened dragged by raw materials, with notable demand divergence — automotive orders were moderate while two-wheeler demand was sluggish. The market was in oversupply, and enterprises lowered processing fees to boost shipments.