Magnesium Prices Consolidate Near Bottom: Producers Sell at Low Prices to Promote Shipments, Downstream Purchases Cautiously on Rigid Demand [SMM Magnesium Weekly Review]

1 Market Review

1 Dolomite

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

This week, domestic delivered prices of dolomite in China remained stable overall, with mainstream quotations holding firm and delivered prices concentrated at 170-180 yuan/mt. Supply side, the core large dolomite mine in Wutai, Shanxi remained suspended, tightening the circulation of local high-grade cargoes and keeping regional supply tight. As a result, primary magnesium smelters adjusted their procurement strategies, extending their procurement radius outward, with production areas such as Hebi in Henan, Datong in Shanxi, and Shiyan in Hubei becoming the main restocking directions. With the replenishment of external cargoes, overall market supply became more ample, easing the earlier supply-demand imbalance, and delivered quotations from various production areas showed no notable fluctuations. In the short term, before mine production resumption news becomes clear, dolomite prices are expected to remain stable.

1.2.1 Magnesium Ingot (Fugu and 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 15,650-15,750 yuan/mt, down 100 yuan/mt WoW.

This week, domestic magnesium prices grinded lower. Primary magnesium smelters in the main production areas actively prepared for the double festival period, with some offering low-price sales promotions to ease inventory and capital pressure. Some primary magnesium producers sold long-cycle futures at 15,650-15,550 yuan/mt, with futures delivery periods ranging from 10 to 20 days. Smelters showed relatively active willingness to sell, while the overall supply side maintained a firm stance on prices. Demand side, foreign trade deliveries were largely completed, and market procurement was mainly driven by domestic trade deliveries and trader stockpiling. Downstream price collection sentiment turned rational, with low acceptance of current prices and a clear rush to buy amid continuous price rise and hold back amid price downturn mentality. Overall, the market remained in a supply-strong, demand-weak pattern, with prices continuing to consolidate in search of a bottom.

1.2.2 Magnesium Ingot (Tianjin Port - China FOB)

This week, China FOB prices were quoted at $2,240-2,340/mt, with an average of $2,290/mt. This week, magnesium ingot FOB prices fell by $10/mt WoW.

This week, the magnesium ingot foreign trade market remained stable overall, with FOB quotations concentrated in the $2,240-2,340/mt range, and supply-demand fundamentals showed no notable improvement. Supply side, domestic magnesium ingot ex-works prices were in the doldrums, with no mainstream low-priced cargoes impacting the market. Raw material supply remained stable, and the cost side provided some support to prices. Demand side, demand in China and overseas remained weak, with pre-holiday stockpiling and delivery procurement for the double festival bringing only modest growth, and no concentrated procurement boosting the market. Foreign trade feedback indicated that the focus was on executing existing orders, with new orders falling short of expectations. Overseas buyers maintained a strong desire to bargain down prices, and market trading sentiment was subdued. As the National Day holiday approaches, the market gradually entered holiday mode, with actual transactions further shrinking. In the short term, magnesium ingot foreign trade is expected to continue its weak but stable pattern, with limited room for price movement in either direction.

1.3 Magnesium Powder

This week, mainstream ex-works prices including tax for 20-80 mesh magnesium powder in China were 16,900-17,000 yuan/mt, and China FOB prices were $2,400-2,500/mt.

This week, the magnesium powder market followed the weakening cost side of magnesium ingot, with the price center edging lower. Weakening cost support led to a narrow downward adjustment in magnesium powder quotations. Supply side, some magnesium powder producers cut production or halted operations due to insufficient demand, but earlier inventories were still being digested. Demand side, domestic steel mills maintained just-in-time procurement of magnesium powder for desulfurization, with no concentrated pre-holiday stockpiling seen, and transactions were mainly sporadic small orders. Overall, with weakening cost support and sluggish demand coexisting, magnesium powder prices are expected to remain in the doldrums and move sideways in the short term.

1.4 Magnesium Alloy

This week, mainstream ex-works prices including tax for magnesium alloy in China were 17,550-17,850 yuan/mt, and mainstream FOB prices for Chinese magnesium alloy were $2,555-2,635/mt.

This week, the domestic magnesium alloy market followed magnesium ingot prices in grinding lower. Approaching month-end, magnesium alloy smelters were mostly formulating production and sales strategies for the next month. Affected by the persistently weak market, inventory pressure at magnesium alloy producers continued to accumulate, and multiple enterprises plan to initiate large-scale production cuts next month, with market supply expected to contract slightly. Demand side, dragged by sluggish terminal auto sales, magnesium alloy shipments showed mediocre performance, and downstream procurement was mainly just-in-time. The overall market showed a supply-demand weak pattern, with alloy processing fees remaining at low levels.

2 Weekly Summary

This week, the magnesium market continued its supply-demand weak pattern. Supply side, magnesium ingot smelters showed active willingness to sell, with some offering low-price sales promotions to ease inventory pressure, but the overall sentiment to hold prices firm remained. Magnesium alloy enterprises held high inventories, with multiple companies planning to initiate large-scale production cuts next month. Demand side, foreign trade deliveries were largely wrapped up, domestic trade maintained only just-in-time restocking, downstream acceptance of current prices was low, and the rush to buy amid continuous price rise and hold back amid price downturn mentality was evident. Weak terminal auto sales further dragged magnesium alloy consumption. Overall, the market showed a supply-strong, demand-weak pattern, consolidating in search of a bottom.