After holding up well, magnesium prices consolidate at highs, while the supply-demand imbalance in the magnesium market remains unresolved [SMM Magnesium Weekly Review]

1 Market Review

1 Dolomite

This week, the EXW tax-exclusive price for 1-3 cm dolomite (Wutai) was 128 yuan/mt, unchanged WoW; the EXW tax-exclusive price for 2-4 cm dolomite (Wutai) was 158 yuan/mt, unchanged WoW.

Delivered prices of dolomite remained generally stable this week. Affected by the continued production halt at a leading dolomite mine in the Wutai area, primary magnesium smelters in major production regions have been adjusting their procurement structures, with sources gradually shifting to other areas. The EXW prices of dolomite from newly developed procurement channels were lower than those from the original Wutai sources, but limited logistical facilities at the origins drove up the allocated transportation costs. Overall, the market had ample supply, supporting delivered dolomite prices to remain stable.

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

This week, magnesium prices held up well. As of press time, mainstream quotations for 99.90% magnesium ingot from the main producing areas were 15,900-16,000 yuan/mt, up 150 yuan/mt WoW.

The domestic magnesium ingot market showed a strong-then-weak trend this week. At the beginning of the week, high-priced deals over the past weekend sustained market confidence, and downstream purchasing sentiment was good. On Monday, magnesium prices stood at 16,000 yuan/mt. However, as rigid-demand orders were gradually delivered, panic sentiment subsided, purchasing sentiment weakened noticeably, and market transactions were sluggish. Smelters’ willingness to hold back from selling faded, low-priced cargoes gradually emerged, and the price center shifted downward. Overall, the supply-demand stalemate in the magnesium market was strong this week, and magnesium prices moved sideways in a narrow range.

1.2.2 Magnesium Ingot (Tianjin Port - China FOB)

This week, the China FOB price was reported at $2,260-2,360/mt, with an average of $2,310/mt. Magnesium ingot export offers maintained a high-level consolidation trend this week, up $20/mt WoW.

The overseas magnesium ingot market showed a high-level consolidation pattern this week. After a rise at the beginning of the week, the FOB quotation for magnesium ingot stabilized at $2,260-2,360/mt. Currently, it is the traditional off-season abroad due to the summer break, so demand is naturally weak. Apart from a small amount of month-end delivery procurement, new spot orders were scarce this week. Inquiries from overseas clients remained sluggish, and overall market trading sentiment continued to be sluggish. Although the rebound in domestic magnesium ingot EXW prices provided some support to export offers, it failed to effectively boost overseas inquiries. In the short term, the foreign trade market shows no clear recovery signals; future trends will depend on changes in overseas procurement pace and actual deal follow-up after the summer break.

1.3 Magnesium Powder

This week, the mainstream tax-inclusive EXW price for 20-80 mesh magnesium powder in China was 17,150-17,250 yuan/mt; the China FOB price was $2,420-2,520/mt.

The magnesium powder market followed the magnesium ingot price, rising first then falling this week. At the beginning of the week, driven by supply-side contraction and month-end delivery procurement, prices rebounded from lows, with magnesium powder quoted at 17,150 yuan/mt. However, downstream fear of high prices emerged subsequently, and deals were insufficient to follow through, so prices gradually stabilized. Overseas, the summer break off-season was in progress, and demand remained weak. Overall, the magnesium powder market showed a characteristic of being “easy to rebound, hard to sustain,” and is expected to move sideways in a narrow range in the short term.

1.4 Magnesium Alloy

This week, the mainstream tax-inclusive EXW price for magnesium alloy in China was 17,950-18,250 yuan/mt, and the mainstream FOB price for magnesium alloy was $2,620-2,700/mt.

The magnesium alloy market followed the magnesium ingot market, showing a strong-then-weak trend this week. Affected by the die-casting off-season, market orders shrank. As a result, the operating rates of magnesium alloy smelters dropped noticeably. Specifically, leading magnesium alloy smelters gradually implemented summer maintenance plans, leading to a slight decline in operating rates at these enterprises. Due to the cliff-like drop in magnesium alloy demand from two-wheeled electric vehicles, small and medium-sized enterprises suspended production for maintenance, causing the market operating rate to halve. Overall, the magnesium alloy market is currently showing a pattern of weak supply and demand, and alloy processing fees are expected to remain under pressure.

2 Weekly Summary

This week, the magnesium market strengthened before stabilizing and consolidating. At the beginning of the week, boosted by positive news, concentrated restocking by traders pushed magnesium prices up to 16,000 yuan/mt. However, after delivery concluded, downstream buyers feared high prices and became cautious, leading to quieter transactions, and some offers edged slightly lower. Overseas summer break continued weakness; FOB offers remained steady, but actual deals were sluggish. Delivered dolomite prices were stable, with ample supply. Magnesium powder followed magnesium ingot, rising initially then easing, while magnesium alloy was impacted by the off-season and shrinking end-use demand, with a noticeable decline in operating rates. Overall, the supply-strong and demand-weak pattern remained unchanged, and magnesium prices are expected to continue moving sideways in the short term.