Tug-of-war between sellers and buyers intensified, magnesium ingot market in the doldrums this week [SMM Magnesium Weekly Review]

1 Market Review

1 Dolomite

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

This week, domestic dolomite EXW prices remained stable overall. Supply side, several large stone material enterprises in Wutai, Shanxi, remained shut down due to environmental protection checks, tightening the supply of high-grade dolomite raw materials. Cargoes from Ordos, Inner Mongolia, Henan, and other regions were diverted and redistributed, keeping national inventory levels adequate overall. Demand side, magnesium plants in Shanxi and Shaanxi regions maintained high operating rates, with just-in-time procurement forming bottom support. However, downstream stockpiling reserves were ample in the earlier period, and the market maintained a pace of purchasing as needed. Currently, the dolomite market showed distinct differentiation, with tight local cargoes and loose national supply. Affected by the supply-demand check, short-term prices may primarily remain stable.

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

This week, magnesium prices drifted lower. As of press time, mainstream market quotations for 99.90% magnesium ingot in main production areas were 15,950-16,050 yuan/mt, down 350 yuan/mt WoW.

This week, domestic magnesium ingot prices fell continuously, with the price center continuing to shift downward. After the holiday, low-priced transaction information during the Dragon Boat Festival gradually spread, and market pessimism gradually expanded. Smelters of primary magnesium showed increasing inclination to sell, and the number of selling enterprises rose notably. Coupled with strong sentiment of rushing to buy amid continuous price rise and holding back amid price downturn among downstream clients, market transactions were primarily just-in-time restocking. Bargaining power gradually shifted to buyers, market quotations gradually loosened, and magnesium prices showed a bearish drip lower. Overall, the magnesium market exhibited a supply-strong demand-weak pattern, with prices falling again to around 16,000 yuan/mt.

1.2.2 Magnesium Ingot (Tianjin Port – China FOB)

This week, China FOB prices were quoted at $2,310-2,400/mt, with an average of $2,365/mt. This week, magnesium ingot export prices were quoted slightly lower overall, remaining relatively stable due to steady EXW prices.

This week, factory quotations stabilized at 16,300 yuan/mt, but the sentiment to hold prices firm was weak, and traders showed evident bearish sentiment. Affected by this, FOB prices were subsequently adjusted down to $2,300-2,330/mt at the start of the week. As the summer break approaches, overseas quarterly orders failed to be released as expected. The market may still be in a wait-and-see stage, lacking new demand follow-up. This week, export orders remained generally sluggish.

1.3 Magnesium Powder

This week, mainstream tax-inclusive EXW prices for 20-80 mesh magnesium powder in China were 17,200-17,300 yuan/mt; China FOB prices were $2,420-2,520/mt.

This week, the magnesium powder market followed magnesium ingot prices, pulling back initially before stabilizing. Overall demand was in the off-season, and enterprises mainly purchased raw materials as needed. Domestic trade orders showed no boost, and in markets outside China, after large-scale ordering in Q1, new orders saw no significant improvement, with overall trading remaining sluggish.

1.4 Magnesium Alloy

This week, mainstream tax-inclusive EXW prices for magnesium alloy in China were 18,000-18,300 yuan/mt, and mainstream FOB prices for magnesium alloy were $2,620-2,700/mt.

This week, magnesium alloy prices followed magnesium ingot prices in a bearish downward trend. Cost side, both main and auxiliary materials showed a bearish downward trend, with the magnesium-aluminum price spread narrowing to around 6,800 yuan/mt, and magnesium alloy processing costs trending downward. In terms of supply and demand, the operating rate of magnesium alloy smelters was stable, and spot supply was ample. Some magnesium alloy die-casting plants saw reduced orders due to the off-season effect. According to feedback from a sales manager at a die-casting plant, the operating rate of die-casting equipment for automotive orders was around 85%, while that for two-wheeler orders was only 30%. Additionally, earlier-production two-wheeler die-cast parts had sluggish inventory sales. Overall market demand showed mediocre performance. In summary, the magnesium alloy market exhibited a supply-strong demand-weak pattern, and magnesium alloy processing fees were in the doldrums.

2 Weekly Summary

This week, domestic magnesium ingot overall drifted lower, with 99.90% magnesium ingot prices in Fugu and Shenmu quoted at 15,950-16,050 yuan/mt, down 350 yuan/mt WoW. After the holiday, market pessimism spread, smelters sold actively, and downstream only made just-in-time procurement. Under a supply-strong demand-weak pattern, prices continued to drip lower. The Tianjin Port FOB average price was $2,365/mt. Domestic factories' efforts to hold prices firm were weak, and FOB prices were simultaneously adjusted down. With the summer break approaching overseas, new orders were scarce, and export trading was sluggish. Dolomite cost support was limited, and magnesium powder and alloy weakened in tandem. Downstream off-season demand was weak, dragging the market. In the short term, magnesium ingot is expected to remain weak and consolidate.