[Dragged Down by Strong Supply and Weak Demand, Magnesium Prices Fell] Magnesium prices were in the doldrums today. Producers' quotes remained firm in the morning session, but some producers cut prices for shipments in the afternoon, with low-priced supplies increasing. Downstream wait-and-see sentiment was strong, with buyers making just-in-time procurement only, and the market showed a pattern of strong supply and weak demand.

[SMM Magnesium Weekly Review: Post-Holiday Magnesium Market Consolidates Weakly, Supply-Demand Dual Weakness Puts Prices Under Pressure] The magnesium industry chain was overall in the doldrums this week. Dolomite prices remained stable, with delivery-to-factory prices consolidating at highs. Magnesium ingot quotes fell due to weak post-holiday restocking and an increase in low-priced supplies, with FOB prices also edging down in tandem. The magnesium powder and magnesium alloy markets held steady with firm processing fees, but downstream buyers remained on the sidelines, presenting an overall pattern of strong supply and weak demand. In the short term, magnesium prices may continue to move sideways.

[Pre-Holiday Surplus Inventory Dragged Down Purchasing, Magnesium Market Trading Sluggish with Short-Term Downward Pressure on Prices] Today, the overall magnesium market trading was sluggish. Smelters maintained firm quotes but offered concessions in some cases. Downstream stocking inventory was sufficient, and the willingness to purchase on demand was weak, leaving short-term magnesium prices under pressure.

[SMM Magnesium Flash News] On the evening of April 28, Baowu Magnesium Industry released its 2025 annual report, showing that in 2025, the company's revenue reached 9.912 billion yuan, with a year-on-year increase of 10.34%; the net profit attributable to the parent company was -18.5489 million yuan, turning from profit to loss year-on-year. The change in the company's performance was mainly affected by the continuous decline in magnesium prices, resulting in a significant year-on-year decrease in the profitability of the magnesium materials business; at the same time, the new project of the company's associated company, Anhui Baomei Light Alloy Co., Ltd., was in the production ramp-up stage, with low output and high costs, and combined with the low magnesium prices.

[SMM Magnesium Weekly Review: Dual Support from Costs and Stockpiling — Magnesium Ingot Prices Stopped Falling and Stabilized This Week] This week, China's magnesium industry chain overall showed a stable-to-firm trend, moving sideways. Raw material dolomite relied on supply from neighboring provinces due to production halts in major producing areas, while downstream primary magnesium smelting operating rates rose to form rigid demand support. Combined with high transportation costs, prices remained stable overall with delivery-to-factory prices consolidating at highs. The Chinese market for magnesium ingots consolidated at lows and stabilized, benefiting from pre-holiday restocking that drove transaction recovery and enterprise sentiment to hold prices firm amid rising smelting costs. The export market remained sluggish as ex-China clients chased lower prices and new orders were weak. Magnesium powder and magnesium alloy markets operated steadily in tandem — the former maintained production based on demand supported by stable domestic and export orders and sufficient raw material inventory, while the latter moved in line with magnesium ingot prices, with processing fees remaining firm and benefiting long-term from demand support driven by tightening regulatory standards for two-wheeled electric vehicles under the new national standard. The overall industry chain supply-demand pattern showed localized divergence but remained generally stable.

Ahead of the Labour Day holiday, the magnesium market saw a recovery in trading activity during the first half of this week, with spot prices holding up well and magnesium prices rising for two consecutive days. Current market support mainly came from the continued release of pre-holiday rigid stocking demand from end-users, with downstream procurement pace following in an orderly manner, effectively revitalizing trading activity in the market. On the other hand, rising coal and ferrosilicon futures prices on the raw material side also provided certain cost support for the magnesium market. Supported by multiple positive factors, suppliers generally maintained firm pricing sentiment, low-priced spot cargo in the market gradually diminished, and the overall magnesium market showed a generally stable with slight rise trend. Magnesium prices rose for two consecutive trading days Spot price side: magnesium ingots and magnesium alloys continued the upward trend from the 28th. Specifically, the SMM 99.90% magnesium ingot (Fugu, Shenmu) price on April 29 was 16,600-16,700 yuan/mt, with an average price of 16,650 yuan/mt, up 0.3% from the previous trading day. The core driver behind this two-day consecutive rise in magnesium prices was pre-holiday restocking demand from downstream end-users. As the Labour Day holiday approached, considering the holiday factor, downstream deep-processing and manufacturing enterprises initiated stockpiling operations in advance, and market procurement enthusiasm improved compared to the previously sluggish conditions. Most downstream enterprises abandoned their earlier wait-and-see sentiment and entered the market to purchase based on their rigid production needs, proactively locking in spot inventory to hedge against post-holiday supply fluctuation risks. The sustained concentrated restocking demand rapidly consumed previously accumulated low-priced inventory in the market, with low-priced resources basically digested and cleared, the market price floor continued to rise, directly driving magnesium prices to raise consecutively. Overall trading activity and transaction sentiment in the market improved during the first half of this week. Outlook Based on the current supply and demand performance in the market, the concentrated release of pre-holiday restocking demand effectively reversed the previously weak market sentiment, boosting confidence among traders and producers to a certain extent. However, from the market pace perspective, after a round of concentrated restocking, downstream stocking demand had been gradually released, and the pre-holiday restocking trend was basically coming to an end. As the Labour Day holiday approached, market procurement activities gradually ceased, and concentrated trading momentum was expected to pull back. Based on current market conditions, domestic magnesium prices were expected to remain generally stable in the short term. In the long term, the domestic magnesium market needs to focus on two aspects going forward: first, the maintenance arrangements and production pace changes of domestic magnesium ingot producers — if mainstream smelters arrange concentrated equipment maintenance and production cuts later, this will directly compress overall market supply, alter the current supply-demand balance, and drive price fluctuations; second, the recovery of demand in markets outside China — currently, ex-China magnesium product demand remained generally stable but weak, and whether export orders can steadily increase and whether export markets can recover will directly affect domestic magnesium ingot exports, becoming an important factor influencing medium and long-term magnesium price trends.

[Magnesium Market Trading Was Sluggish Today with Prices Stable in a Narrow Range] Magnesium market trading was sluggish today with weak transactions. Pre-holiday downstream stocking was wrapping up, demand follow-through was insufficient, market supply was strong while demand was weak, and manufacturers held prices firm to support magnesium prices remaining stable within a range.

[Magnesium Market Consolidated at Lows and Stabilized Early in the Week, with Magnesium Prices Trading Within a Range] Driven by restocking ahead of the Labour Day holiday, downstream purchasing recovered, low-priced supplies in the market were quickly cleared, and magnesium producers showed a stronger willingness to hold prices firm and raised their quotations.

[Magnesium Market Consolidated at Lows and Stabilized at the Beginning of the Week, Magnesium Prices Maintained Range-Bound Movement] Today, 99.90% magnesium ingot was quoted at 16,500-16,600 yuan/mt in the main producing areas, unchanged from earlier quotes.

In early April, the industry chain held strong bullish sentiment, with manufacturers showing obvious reluctance to sell. Market available supplies remained tight, end‑use enterprises stocked up in advance, and overall market transactions were robust. Coupled with rising speculative demand and growing willingness among traders to hoard goods, magnesium prices trended upward step by step.In mid-to-late April, driven by height aversion, end‑use procurement slowed down. Meanwhile, manufacturers engaged in panic selling, leading to continuous gradual declines in market prices. Simultaneous Rise in Primary Magnesium and Magnesium Alloy Output – Supply Growth Far Outpaces Demand Analysis of Pressures on Magnesium Price Upside Taking primary magnesium and magnesium alloy output in March 2026 as an example: Primary magnesium output in March 2026 increased by 25,100 tonnes year-on-year. Magnesium alloy output in March 2026 rose by 22,900 tonnes year-on-year. Based on an average scrap addition ratio of 29.3% and alloying element addition ratio of 10% for magnesium alloys, demand for primary magnesium from the magnesium alloy sector in March 2026 is estimated at 13,900 tonnes.The supply–demand mismatch and blind mutual expansion on both supply and demand sides created an estimated demand gap of 11,200 tonnes. Affected by this, magnesium prices saw repeated upward spurts driven by speculative sentiment and end‑use restocking, yet struggled to hold high levels, resulting in a narrow range‑bound trend. Traditional Export Demand for Primary Magnesium Blocked in Short Term Magnesium Alloy Demand Alone Unable to Support the Market Since 2026, customs has continuously strengthened crackdowns on non‑compliant export practices involving magnesium products. Meanwhile, supervision over magnesium‑containing substances potentially subject to dual‑use item export controls, as mentioned in relevant 2024 policies, has also tightened. Recently, all vessels carrying magnesium‑containing substances have been required to provide quality inspection certificates proving the goods do not fall into the dual‑use item category specified in policy documents before being cleared. This measure has sent a clear tightening signal to the magnesium export market, and supervision is expected to intensify further going forward. In the current magnesium ingot market, exports remain the main consumption pillar for primary magnesium. However, ongoing tighter customs supervision has significantly increased export risks for foreign trade traders. Out of caution, some merchants have slowed the pace of export order fulfillment.Coupled with the market psychology of “buying on rises, not on declines”, traders have generally delayed purchasing plans, leading to weak short‑term external demand. Speculative Sentiment Amplifies Magnesium Price Volatility Market Awaits Return to Rationality As magnesium alloy projects come on stream one after another, social capital has accelerated its entry into the sector.In early April, strong bullish sentiment and active transactions drove a rapid rise in magnesium prices. But after hitting highs, upward momentum faded. Previously accumulated low‑cost inventories were sold off in bulk at lower prices, pushing magnesium prices into a downward spiral and spreading panic. In addition, smelters faced dual pressures of funding and inventories, causing market quotations to keep falling and locking the sector in a vicious cycle of price competition. Supply‑Strong–Demand‑Weak Pattern Established in Magnesium Market Where Will Magnesium Prices Head Next? Driven by profit margins, operating rates of primary magnesium smelters continued to rise in April. National primary magnesium output in April is expected to hit another historical high, with a month-on-month increase of more than 4,000 tonnes compared to March, further reinforcing the supply‑strong–demand‑weak pattern.A meaningful boom in magnesium alloy demand has yet to materialize. Overall, the market is expected to remain weak in the short term. However, current price levels are gradually approaching the break‑even point for primary magnesium smelters, which may choose to conduct maintenance or suspend production. SMM will closely track operating rates of primary magnesium smelters in major production areas in a timely manner.