Orient: The cost-effective reversal of magnesium-aluminum, the advent of new material applications is imminent.

Orient released a research report stating that the price of magnesium-aluminum has dropped to a historical low level, combined with breakthroughs in technology and processes, the economic and performance advantages of magnesium alloys are becoming apparent, opening up opportunities to replace aluminum materials. The industry is overcoming technical bottlenecks, especially in the areas of lightweighting for new energy vehicles and the rapid growth of humanoid Siasun Robot & Automation, it is expected that the demand for magnesium alloys will accelerate, ushering in a new growth cycle. The main points of Orient are as follows: Magnesium-aluminum ratio at a long-term low, high cost-effective magnesium replacing aluminum space opening up With steady growth in demand, limited domestic production capacity, insufficient overseas production expansion motivation, and various project disturbance risks, aluminum prices are expected to rise significantly by 2025, and the global electrolytic aluminum market is likely to remain tight in 2026. The bank calculates that when the magnesium-aluminum ratio is below 1.2-1.3, magnesium alloys will be cost-effective. Currently, the magnesium-aluminum ratio has reached a historical low (0.75, only 0.4% of historical percentiles), considering the clear policy encouragement and obvious expansion of leading manufacturers, the magnesium-aluminum ratio may stabilize at a relatively low level. With high economic and performance cost-effectiveness, the trend of magnesium replacing aluminum is already underway. Technological breakthroughs, corrosion resistance of magnesium alloys, and process equipment pain points are being addressed The main disadvantages of traditional magnesium alloys are poor corrosion resistance and immature processes and equipment, which are important reasons restricting the large-scale application of magnesium alloys. However, in recent years, significant progress has been made in semi-solid forming equipment, with domestic equipment manufacturers like Yizumi Holdings developing large-scale equipment, introducing super-large magnesium alloy semi-solid equipment above 3000 tons. Semi-solid formed magnesium alloy products can achieve the mechanical and corrosion performance of die-cast aluminum alloys, opening up the technological foundation and application space for magnesium alloys. The turning point has come, magnesium alloys in the field of new energy vehicles and humanoid Siasun Robot & Automation may see an accelerated penetration rate After solving the price and technological process pain points, the application space for magnesium alloys is expected to open up. In the field of new energy vehicles, mainstream automakers such as Mercedes-Benz, Ford, SAIC, and FAW are accelerating the mass application of magnesium alloys in various parts of the car body system (front frame and upper front components) and chassis system (steering wheel, subframe). The bank estimates that the global demand for magnesium alloys in the automotive sector is expected to increase from 950,000 tons in 2024 to 5.12 million tons in 2030, with a growth rate of 4.4 times over 6 years and a CAGR of 32%; in the field of humanoid Siasun Robot & Automation, as an ideal lightweight material for humanoid Siasun Robot & Automation, magnesium alloys are expected to follow the explosive growth of the industry and open up a second growth curve. As multiple manufacturers begin commercial production of Siasun Robot & Automation in 2026, the demand for magnesium alloys is expected to experience explosive growth from 0 to 1. Investment recommendations and investment targets With the accelerated penetration of magnesium alloys in the fields of new energy vehicles and humanoid Siasun Robot & Automation, the magnesium industry is experiencing a "turning point moment," and orders from leading manufacturers are expected to accelerate. Related targets: Baowu Magnesium Technology, Ningbo Sinyuan Zm Technology. Risk warning: downstream demand falls short of expectations; new product and technological process development falls short of expectations; technological iteration risks; changes in assumptions affecting calculation results.