Magnesium Industry Chain Diverges Weakly Within the Week, Decline Slows but Recovery Lacks Momentum [SMM Magnesium Weekly Review]

1 Market Review

1 Dolomite

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

This week, 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 ore and keeping regional supply tight. As a result, primary magnesium smelters adjusted their purchasing strategies, extending their procurement radius to production areas such as Hebi in Henan, Datong in Shanxi, and Shiyan in Hubei as the main replenishment sources. With external supply arriving, overall market supply became more ample, easing the earlier supply-demand imbalance, and delivered quotations across production areas showed no notable fluctuations. In the short term, before mine production resumption news becomes clear, dolomite prices are expected to remain largely 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 15,200-15,300 yuan/mt, down 400 yuan/mt WoW.

This week, magnesium prices continued to drift lower. Since returning from the National Day holiday, mainstream quotations had fallen from 15,650 yuan/mt to 15,250 yuan/mt. Under the oversupply situation, magnesium plants sold in panic, pushing prices steadily lower; however, as magnesium prices approached the cost range of 15,200-15,300 yuan/mt, magnesium plants' hold-back-from-selling sentiment recovered, slowing the decline and gradually showing signs of stabilization. The current oversupply situation has not been effectively reversed, and upward pressure on prices remains significant. In the short term, magnesium prices are likely to consolidate at lows.

1.2.2 Magnesium Ingot (Tianjin Port - China FOB)

This week, China FOB prices were quoted at $2,150-2,250/mt, with an average of $2,200/mt. This week, magnesium ingot FOB prices were down $50/mt WoW.

This week, magnesium ingot prices drifted lower, and foreign trade prices weakened passively along with domestic ex-works prices. This week, magnesium ingot prices drifted lower, and foreign trade quotations pulled back passively in line with domestic ex-works prices. Currently, plant and social inventories are at high levels, and shipments of high-priced spot cargo are blocked. Some magnesium plants sold at low prices, dragging foreign trade prices down in tandem. Additionally, exchange rate fluctuations on the foreign trade side were significant, and traders remained cautious about taking orders at low prices, with no notable new orders concluded. The pace of stockpiling was slow, and the market was mainly in a wait-and-see mode. Although news of large overseas downstream tenders emerged recently, it only provided a slight boost to sentiment, as actual purchases and deliveries have not yet materialized, offering limited upside. In the short term, before actual orders are concluded, the foreign trade market is expected to remain in the doldrums.

1.3 Magnesium Powder

This week, mainstream tax-inclusive ex-works prices for 20-80 mesh magnesium powder in China were 16,450-16,550 yuan/mt; China FOB prices were $2,310-2,410/mt.

This week, the magnesium powder market was in the doldrums. Magnesium powder prices weakened in tandem with raw material magnesium ingot. Demand side, steel desulfurization demand remained sluggish, and exports showed no improvement. Operating rates at overseas small and medium-sized steel mills pulled back, and with previously imported inventory still being digested, downstream purchase willingness was low. Production cuts have already emerged in the market due to losses, but the scale of cuts remains limited. In the short term, magnesium powder prices are likely to continue passively following magnesium ingot weakness.

1.4 Magnesium Alloy

This week, mainstream tax-inclusive ex-works prices for magnesium alloy in China were 17,050-17,350 yuan/mt, and mainstream FOB prices for Chinese magnesium alloy were $2,445-2,535/mt.

This week, the magnesium alloy market saw intensifying divergence, with smelters on the supply side arranging production cuts one after another. Downstream demand structure was thin: magnesium alloy demand from two-wheeled electric vehicles weakened notably, driving concentrated production cuts among manufacturers in Shaanxi; automotive demand remained sluggish, with orders at top-tier players falling significantly, and manufacturers in Anhui and Shanxi also cutting production successively. Although some manufacturers still increased production, overall output fell notably. Magnesium alloy is expected to enter a destocking phase, and processing fees are unlikely to improve in the short term.

2 Weekly Summary

This week, the magnesium industry chain was broadly in the doldrums. Raw material side, the Wutai dolomite mine remained suspended, and after enterprises replenished supply through external purchases, supply eased and ore prices held steady. Magnesium ingot prices in China continued to fall, with the decline slowing near the cost line and prices consolidating at lows. Meanwhile, FOB prices followed domestic prices lower, and overseas inquiries only boosted sentiment without actual orders concluded. Magnesium powder and magnesium alloy were also under pressure, with downstream demand from automobiles, EVs, and steel desulfurization remaining weak. Processing enterprises cut production and destocked, and processing fees were unlikely to improve. In the short term, the market is likely to remain in the doldrums.