Tug-of-War Between Sellers and Buyers Intensified; This Week’s Magnesium Ingot Market Saw Stalemate and Consolidation [SMM Magnesium Weekly Review]

1. Market Review

1. Dolomite

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

This week, domestic dolomite EXW quotations remained stable on the whole. On the supply side, due to environmental inspections, major quarries in Wutai, Shanxi, remained shut down, tightening the availability of high-grade raw materials. Supply from Hubei, Inner Mongolia, and Henan continued to flow out to fill the gap, keeping nationwide spot inventories at comfortable levels. On the demand side, smelters in Shanxi and Shaanxi maintained high operating rates for primary magnesium production, underpinning procurement with just-in-time demand. However, sufficient earlier stockpiling by downstream buyers meant the market mostly saw sporadic, as-needed purchases, with weak willingness to procure large volumes. Overall, the landscape features localized tightness amid nation-wide surplus. In the short term, with an ongoing tug-of-war between sellers and buyers, dolomite prices are likely to remain largely stable with limited room to fluctuate.

1.2.1 Magnesium Ingot (Fugu and Shenmu – Main Production Hub)

This week, magnesium prices were locked in a stalemate and consolidation. As of this writing, mainstream quotations for 99.90% magnesium ingot in the main production hub were 16,300-16,400 yuan/mt, basically flat WoW.

This week, China’s magnesium ingot market moved sideways. Specifically, the stalemate between supply and demand became increasingly intense. On the supply side, primary magnesium smelters raised daily output to reduce per-tonne costs. June primary magnesium production from the main hub is estimated to have reached 70,000 mt. Ample spot supply intensified supply pressure on producers, which subdued upward momentum for magnesium prices; smelters’ offers were mostly aimed at holding prices firm. On the demand side, market procurement was predominantly limited to just-in-time restocking, with downstream demand providing little support. On the whole, the market is oversupplied with weak demand. Most primary magnesium smelters held prices firm, buoyed by cost support. As a result, magnesium prices were consolidating at lows.

1.2.2 Magnesium Ingot (Tianjin Port – FOB China)

This week, China’s FOB price was reported at $2,330-2,400/mt, averaging $2,365/mt. FOB quotations for magnesium ingot were generally on the lower side this week, remaining relatively stable due to steady EXW prices.

This week, smelter offers stabilized at 16,300 yuan/mt, but the sentiment to hold prices firm was weak, and traders showed a clear bearish outlook. Consequently, FOB quotations slipped to $2,300-2,330/mt early in the week. As the summer holiday approaches, quarterly orders from outside China did not materialize as expected. The market appeared to remain in a wait-and-see mode, lacking fresh demand momentum; this week, FOB trading continued to be sluggish overall.

1.3 Magnesium Powder

This week, the mainstream EXW tax-inclusive price for 20-80 mesh magnesium powder in China was 17,650-17,750 yuan/mt; China’s FOB price was $2,465-2,565/mt.

This week, the magnesium powder market first pulled back before stabilizing in alignment with magnesium ingot prices. Overall demand was in an off-season, with enterprises purchasing raw materials as needed. Domestic trade orders provided no boost. Outside China, following large-scale orders in Q1, new orders showed no notable improvement, with overall trading relatively sluggish.

1.4 Magnesium Alloy

This week, the mainstream EXW tax-inclusive price of magnesium alloy in China was 18,400-18,600 yuan/mt, and the mainstream FOB price was $2,675-2,755/mt.

This week, magnesium alloy prices fluctuated within a narrow range, tracking raw material magnesium ingot prices. Specifically, magnesium alloy smelters maintained stable production, but order differentiation among them intensified. Leading smelters balanced production and sales, while orders for mid-tier enterprises remained sluggish, with some experiencing worsening inventory buildup. On the whole, the magnesium alloy market faces a supply-demand pattern of robust supply and weak demand. Going forward, magnesium alloy price trends are expected to reflect an increase in low-priced supply and a widening price spread.

2. Weekly Summary

This week, the overall market for dolomite and magnesium-based products was stable, featuring a supply-demand pattern of ample supply and weak demand. Quarries in Wutai, Shanxi, were shut down due to environmental protection measures, leading to regional tightness in high-grade dolomite, but nationwide inventories were ample, and downstream procurement was as-needed, keeping prices stable. In the main production hub, magnesium ingot supply was abundant, with downstream buyers only making just-in-time purchases. The market was in a stalemate. FOB orders were sluggish and the wait-and-see sentiment was relatively strong. Magnesium powder followed the trend of raw materials, with the industry in a demand off-season and both domestic and FOB trading mediocre. Magnesium alloy production was steady, but enterprise orders were divergent, inventories at some producers rose, low-priced supply increased, and the price spread widened. Across the industry chain, the tug-of-war between supply and demand intensified. In the short term, prices for all categories had limited room to fluctuate and would continue to operate steadily.