1 Market Review
1 Dolomite
This week, the ex-factory price (excluding tax) for 1-3 grade dolomite (Wutai) was 78 yuan/mt, and for 2-4 grade dolomite (Wutai) it was 128 yuan/mt, with prices remaining stable.
Dolomite prices remained stable this week. Supply side, major dolomite producers in the Wutai area are still in a production halt phase, with market transactions mainly focused on delivering existing inventory. Producers in Hubei region are operating normally, ensuring a steady supply of dolomite. Demand side, magnesium plants that had suspended operations due to high temperatures are gradually resuming production. Additionally, magnesium plants planning to resume production due to improved profit margins will also start production soon, leading to an expected increase in magnesium ingot supply. As a result, demand for dolomite is increasing, and underpinned by this demand, dolomite prices are expected to remain firm.
1.2 Magnesium Ingot
1.2.1 Magnesium Ingot (Fugu, Shenmu - Main Production Area)
This week, the mainstream quotations for 99.90% magnesium ingot in the main production area were 17,250-17,350 yuan/mt, with magnesium prices showing a weak-to-strong trend.
Magnesium prices exhibited a weak-to-strong trend this week. At the beginning of the week, magnesium plant quotations were slightly firm only on Monday. Subsequently, influenced by downstream bargain down purchasing prices, the mainstream transaction prices fell, reaching 17,100-17,200 yuan/mt by mid-week. Some traders entered the market for purchases, and as news spread, the reluctance to budge on prices among magnesium plants increased, temporarily halting the downward cycle of magnesium prices. Traders began to place orders, and magnesium prices bottomed out and rebounded. Overall, the magnesium market remains in a tug-of-war between sellers and buyers. On the supply side, smelters are gradually resuming full production, and there is still a surplus in recent accumulated inventories, leading to increased inventory pressure. On the demand side, foreign trade deliveries at month-end may provide some support to magnesium prices, making it difficult for prices to fluctuate significantly next week.
1.2.2 Magnesium Ingot (Tianjin Port - China FOB)
This week, the FOB China price was reported at $2,380-2,430/mt, with an average of $2,405/mt. Prices continued to weaken at the beginning of the week but rose slightly from mid-week onwards as factories became more reluctant to budge on prices.
This week, overseas tenders and inquiries for magnesium ingots were active, but actual transaction volumes were limited. FOB quotations showed a clear divergence: spot and shipments before mid-September were concentrated in the range of $2,370-2,390/mt, while October deliveries saw higher quotes of $2,450-2,500/mt due to cautious observation by traders. According to the SMM survey, downstream acceptance of high prices is generally low, and specific transaction details will become clearer in early September. The market is currently in a tug-of-war between sellers and buyers. Export prices are affected by unclear policy expectations for October, and are also supported by domestic magnesium plants' strong reluctance to budge on prices. If ex-factory prices continue to rise, FOB quotes may also increase.
1.3 Magnesium Powder
This week, magnesium powder prices slightly decreased, with the mainstream tax-inclusive ex-factory price for 20-80 mesh Chinese magnesium powder ranging from 18,450 to 18,650 yuan/mt; the Chinese FOB price was $2,530-$2,580/mt.
The purchasing pace in the magnesium powder market slowed down this week, with companies mostly adopting a strategy of purchasing as needed to cope with raw material price fluctuations. On the production side, output steadily increased this month. From export data, July exports significantly rose, and part of August's order demand has been released in advance.
1.4 Magnesium Alloy
This week, the mainstream tax-inclusive ex-factory price for Chinese magnesium alloy ranged from 18,900 to 19,000 yuan/mt, and the mainstream FOB price for Chinese magnesium alloy was $2,580-$2,650/mt.
This week, magnesium alloy prices fluctuated in tandem with magnesium ingot prices, maintaining a high-level consolidation. On the demand side, recent new national standards for EVs have driven EV manufacturers to choose lightweight materials such as magnesium alloys, leading to a surge in EV demand. AM60 magnesium alloy, due to its widespread use in EVs, saw an increase in demand. According to a magnesium alloy plant manager, magnesium alloy demand in August increased slightly YoY. On the supply side, major magnesium alloy producers operated normally. Overall, driven by demand, magnesium alloy inventory is at a lower level compared to previous years, and it is expected that magnesium alloy prices will fluctuate rangebound at high levels, following magnesium ingot prices.
2 Weekly Summary
This week, the magnesium industry chain showed a trend of weakening first and then strengthening. Upstream dolomite prices remained stable, with steady dolomite supply this week. As magnesium plants gradually resume production, demand is expected to grow, and prices are likely to remain firm. In the main producing areas, magnesium ingot prices were weak initially but strengthened later. Currently, there is a tug-of-war between sellers and buyers, and it is expected that prices will be difficult to move up or down next week. Tianjin Port FOB prices rose slightly mid-week, supported by policy expectations and domestic price resistance, and may adjust with ex-factory prices. Magnesium powder prices slightly decreased, with slower purchasing but improved production and exports. Magnesium alloy prices followed magnesium ingot prices in high-level consolidation, with EV demand driving growth and low inventory levels, and are expected to fluctuate rangebound at high levels.
