1 Market Review
1 Dolomite
This week, the ex-factory price (excluding tax) for 1-3 cm dolomite (Wutai) was 108 yuan/mt, flat WoW, while that for 2-4 cm dolomite (Wutai) was 138 yuan/mt, also flat WoW.
This week, the domestic dolomite market continued its stable trend. Supply side, leading dolomite enterprises maintained a steady pace of capacity release, providing solid support for overall industry supply, with market supply remaining ample. Demand side, primary magnesium smelters in major producing areas maintained normalized operating rates, sustaining the release of rigid demand for dolomite, which formed a solid demand floor. Overall, the current dolomite market's supply-demand pattern tends towards a dynamic balance, and prices are expected to remain stable in the short term.
1.2 Magnesium Ingot
1.2.1 Magnesium Ingot (Fugu, Shenmu - Major Producing Areas)
This week, magnesium prices fluctuated rangebound. As of press time, the mainstream quotations for 99.90% magnesium ingot in major producing areas were 15,600-15,700 yuan/mt, up by 50 yuan/mt compared to last Thursday.
This week, magnesium prices showed strength early in the week before weakening. At the start of the week, upon market return, smelters showed strong reluctance to sell, collectively raising quotations in major producing areas. Some downstream customers with imminent delivery commitments entered the market to restock. However, the market structure of strong supply and weak demand led to strong bearish sentiment among downstream customers, resulting in relatively rational market procurement. After prices rose to 15,700 yuan/mt quotations, the stalemate intensified, and the magnesium market entered a sideways consolidation phase. Overall, market news was somewhat mixed this week; factors such as the establishment of the magnesium alliance provided some bottom support for prices, but the fundamental supply-demand imbalance remains unresolved, leaving upward momentum for magnesium prices insufficient.
1.2.2 Magnesium Ingot (Tianjin Port - FOB China)
This week, the FOB China price was quoted at $2,200-2,280/mt, with an average price of $2,240/mt. The foreign trade market tended towards sluggishness this week, with trading quotations holding steady.
Coinciding with the Christmas holiday this week, overall orders in the foreign trade market were sluggish, with only scattered small orders concluded in India. Transaction prices remained at the lower end of the FOB $2,200-2,240/mt range. Currently, overall trading in the overseas market is weak, and this trend is expected to persist until after the holidays around January 5 next year, when new order growth is anticipated. Traders had completed their main stockpiling during previous low-price periods, but recently, a small number of orders are still seeking opportunities for low-price replenishment. Overall, foreign trade demand is expected to remain weak in the short term.
1.3 Magnesium Powder
This week, the mainstream tax-included ex-factory price for 20-80 mesh Chinese magnesium powder was 16,800-17,000 yuan/mt; the FOB China price was $2,370-2,430/mt.
This week, magnesium powder prices were supported by raw material costs, showing an overall stable trend with a slight strengthening tendency. Demand side, foreign trade orders performed well since November, leading to an overall increase in demand; the domestic trade market maintained a rigid procurement pace. Supply side, magnesium plants saw a significant rise in operating rates in Q4, and most still adopted a sales-based production strategy, with magnesium powder production increasing this month in response to demand. Recently, magnesium powder producers also purchased magnesium ingots in the market according to production plans, with transaction prices mostly at the lower end of the quotation range in major production areas. Magnesium powder prices are expected to continue following raw material trends and maintain stable operation.
1.4 Magnesium Alloy
This week, the mainstream tax-included ex-factory price for Chinese magnesium alloy was 17,750-17,950 yuan/mt, and the mainstream FOB price for Chinese magnesium alloy was $2,470-2,520/mt.
Last Friday, magnesium alloy processing fees rose slightly, and downstream customers gradually accepted high-priced orders. This week, magnesium alloy prices held up well. Supply and demand side, supply side, operating rates for magnesium alloy in Anhui, Shanxi, and Shaanxi saw small increases, but some magnesium alloy enterprises have orders scheduled until February, leading to tight spot supply and undersupply of magnesium alloy spot cargo. Affected by this, magnesium alloy processing fees steadily increased. Cost side, raw material magnesium ingot prices fluctuated rangebound, with the benchmark price rising slightly. Overall, the current tight balance in the magnesium alloy market is difficult to reverse in the short term, and magnesium alloy prices are expected to hold up well in the near term.
2 This Week's Summary
This week, the magnesium market overall showed a pattern of strong supply and weak demand, with prices of main products under pressure. Raw material side, dolomite prices remained stable, supported by a supply-demand balance. Magnesium ingot prices accelerated their decline, with 99.90% magnesium ingot quotations in main production areas dropping to 15,500-15,600 yuan/mt, down 400 yuan/mt WoW. Intensified involution on the supply side and a wait-and-see sentiment among buyers jointly pushed prices down. FOB quotations for foreign trade were also under pressure, with actual transactions leaning towards the lower end, and traders awaiting further price pullbacks. Among downstream products, magnesium powder prices accelerated their pullback following the decline in raw materials. Although order backlogs saw a short-term rebound due to Christmas stockpiling, overall demand remained weak. The magnesium alloy market, despite tight spot supply and full order books, saw its strong processing fee performance suppressed by weak raw material magnesium ingot prices. The market overall exhibited characteristics of weak raw materials transmitting downstream.
