Magnesium Ingot Prices Continued to Weaken This Week, Market Pattern of Strong Supply and Weak Demand Persisted [SMM Magnesium Weekly Review]

1 Market Review

1 Dolomite

This week, the ex-factory tax-exclusive price of 1-3 cm dolomite (Wutai) was 108 yuan/mt, flat WoW, and the ex-factory tax-exclusive price of 2-4 cm dolomite (Wutai) was 138 yuan/mt, flat WoW.

This week, China's dolomite market maintained overall stable operation. Supply side, the Wutai area remained in a production shutdown state, with current market supply mainly supplemented by stone factories in surrounding counties, and overall supply was basically stable. Demand side, the operating rate of primary magnesium enterprises in major producing areas rebounded slightly, and smelters mostly restocked based on rigid demand, effectively supporting market demand for dolomite. Crude oil prices held up well internationally, keeping transportation costs persistently elevated and providing certain support for market prices. Overall, delivery-to-factory prices for dolomite are expected to remain stable in the short term.

1.2.1 Magnesium Ingot (Fugu, Shenmu – Major Producing Areas)

This week, magnesium prices fell continuously. As of the time of publication, mainstream quotations for 99.90% magnesium ingot in major producing areas were 16,600-16,700 yuan/mt, down 400 yuan/mt WoW.

This week, the magnesium market continued under pressure, with the price decline accelerating further mid-week as primary magnesium smelters competed to sell at low prices, triggering a price collapse in the market. Specifically, affected by capital pressure and bearish expectations for the market outlook, smelters generally showed strong willingness to sell this week, with ample low-priced supply in the market, and prices were even adjusted twice in a single day during certain periods. End-user wait-and-see sentiment was strong, with purchases made as needed only when prices were suitable, and market transactions gradually picked up in the second half of the week. Overall, the magnesium market this week continued to see a pattern of strong supply and weak demand, with prices remaining in the doldrums.

1.2.2 Magnesium Ingot (Tianjin Port – China FOB)

This week, the China FOB price was quoted at $2,500-2,600/mt, with an average of $2,550/mt. The export market turned sluggish this week, with market quotations pulling back significantly.

This week, the magnesium ingot export market returned to a downward trajectory overall. On one hand, affected by consecutive declines in magnesium ingot ex-factory prices, downstream wait-and-see sentiment was strong, and ex-China clients held off on placing orders, still waiting for prices to pull back to their psychological expectation range, leading to continued weak price performance. On the other hand, export shipments remained generally stable, while low-priced supply became active again in the market, further dragging down the lower end of quotations. It is expected that as ex-factory prices enter a downward trajectory, prices will continue to decline in the short term.

1.3 Magnesium Powder

This week, the mainstream tax-inclusive ex-factory price of 20-80 mesh magnesium powder in China was 17,800-17,900 yuan/mt; the China FOB price was $2,560-2,660/mt.

This week, magnesium powder prices continued to decline overall following the reduction in magnesium ingot ex-factory prices. Market demand orders remained stable, and enterprises mostly produced based on demand. Regarding raw material procurement, as most orders had been locked in at the beginning of the month, magnesium powder plants had relatively sufficient raw material inventory, and current purchase willingness was low, a sentiment that further weighed on magnesium ingot prices. Magnesium powder prices are expected to still have certain downside room in the short term.

1.4 Magnesium Alloy

This week, the mainstream tax-inclusive ex-factory price of 20-80 mesh magnesium powder in China was 17,800-17,900 yuan/mt; the China FOB price was $2,560-2,660/mt.

This week, magnesium powder prices continued to decline overall following the reduction in magnesium ingot ex-factory prices. Market demand orders remained stable, and enterprises mostly produced based on demand. Regarding raw material procurement, as most orders had been locked in at the beginning of the month, magnesium powder plants had relatively sufficient raw material inventory, and current purchase willingness was low, a sentiment that further weighed on magnesium ingot prices. Magnesium powder prices are expected to still have certain downside room in the short term.

2 Weekly Summary

This week, China's dolomite market operated steadily, with supply basically stable. Rigid restocking demand from primary magnesium enterprises supported demand, and combined with elevated transportation costs, short-term prices are expected to remain stable. The magnesium ingot market was in the doldrums overall, with producers in major producing areas selling at low prices under the influence of capital pressure and bearish market expectations, resulting in a pattern of strong supply and weak demand with continued price reductions. The export market was sluggish, with ex-China buyers adopting a wait-and-see approach and pushing for lower prices, and FOB prices weakened in tandem, with downward pressure persisting in the short term. Magnesium powder prices pulled back following magnesium ingot, with enterprises producing based on demand. Raw material inventory was sufficient and procurement enthusiasm was low, leaving certain downside room for prices in the short term. Magnesium alloy prices moved in line with magnesium ingot, with processing fees remaining relatively stable. Producers maintained stable supply, and end-user restocking on an as-needed basis drove a slight recovery in transactions, but overall the market still showed strong supply and weak demand.