Core Viewpoint - In 2025, the Fugu County Taxation Bureau will innovate the "Addition, Subtraction, Multiplication, and Division" governance model to build a refined tax and fee management system that covers the entire chain and process, enhancing the tax business environment to accelerate the high-end, intelligent, and green development of the local magnesium industry [1] Group 1: Addition - The Fugu County Taxation Bureau has issued the "Standardized Management Guidelines for Tax and Fee Processes in the Metal Magnesium Industry" to ensure that policies benefit enterprises directly [2] - A joint meeting mechanism has been established with multiple departments to share industry data and accurately grasp development dynamics [2] - Differentiated services are implemented across various links of the industry chain to promote the transition from raw magnesium output to deep processing [2] Group 2: Subtraction - The bureau has innovated a "one-form integration" declaration process, reducing the average declaration time from 15 minutes to 7 minutes [3] - A closed-loop mechanism for policy implementation has been established, achieving same-day refunds for VAT credits [3] - The bureau has adopted "flexible law enforcement + precise supervision," resulting in a 40% year-on-year decrease in enterprise inspections, effectively reducing disruptions to normal business operations [3] Group 3: Multiplication - Since last year, the Fugu County Taxation Bureau has focused on building a digital service system that includes "intelligent push + remote consultation + online processing," further lowering tax compliance costs for enterprises [4] - Big data is utilized for comprehensive risk scanning, providing "health check" warnings and customized service plans for key enterprises to effectively address various tax-related issues [4] Group 4: Division - The bureau has introduced a "risk warning + policy guidance" pre-service to proactively assist enterprises in avoiding risks [5] - An innovative tax-enterprise communication model has been developed to resolve tax-related conflicts [5] - A "tax + bank" financing green channel has been established, helping enterprises secure over 150 million yuan in financing throughout the year, effectively alleviating financial pressures in the industry chain and stimulating innovation in the local magnesium industry [5]

Report Summary 1. Investment Rating No investment rating information is provided in the report. 2. Core Viewpoints - China is a major producer of primary magnesium, with its production capacity accounting for about 85% of the global total. Shanxi Province holds a significant advantage in the magnesium industry due to its abundant resource reserves, complete industrial chain, and strong technological innovation capabilities [3]. - The magnesium - to - aluminum price ratio has dropped to 0.7 times, highlighting the cost - effectiveness of magnesium. However, the downstream application of magnesium has not yet been fully launched. The demand for magnesium is expected to gradually increase with the growth of the market for lightweight automobiles, two - wheeled electric vehicles, and new energy vehicles [4]. - Shanxi magnesium enterprises face intensified industry competition, especially from the acceleration of central and state - owned enterprises' entry into the market [4]. - Most Shanxi magnesium enterprises have an open attitude towards futures tools and will gradually strengthen their futures - related team building and the application of these tools after the listing of magnesium futures [4]. 3. Summary by Company Company A - **Enterprise Situation**: Privatized in 2001 and reorganized in 2015. It has an annual production capacity of 65,000 tons of primary magnesium, 30,000 tons of magnesium alloy, and 50,000 tons of deep - processed magnesium products, with 10 production lines for deep - processed products. It has its own mine with a reserve of 2 - 3 million tons per year. Its annual revenue from the magnesium industry is less than 1.5 billion yuan, and the annual R & D investment is about 40 million yuan [5]. - **Business Model**: The domestic mainstream magnesium smelting process is the Pidgeon process. Different from the production in Yulin, Shaanxi, which uses coke oven gas, this enterprise has been focusing on deep - processing since 2020 and has a large environmental protection investment. The pricing model varies, with different payment terms for different customers. Overseas sales account for 10% of the total [6]. - **Production Profit**: In 2025, the sales revenue of magnesium alloy was less than 1.5 billion yuan, and that of the deep - processing sector was more than 200 million yuan. The gross profit rate of deep - processed products varies, with military products at 40 - 50%, general products at 15 - 20%, and magnesium alloy products at 20% [7]. - **Future Plan**: Focus on increasing the deep - processing capacity and market development, especially for high - end products such as magnesium alloy automobile wheels. Continuously invest in the green transformation of smelting technology. Be cautious about entering the automotive industry [8]. - **Futures Participation**: Willing to participate in the futures market after the listing of magnesium futures [9]. Company B - **Enterprise Situation**: Mainly engaged in primary magnesium, extrusion, and control processes. It has an annual production capacity of 50,000 tons of primary magnesium (40,000 tons at full capacity), 30,000 - 50,000 tons of magnesium alloy, and 50,000 tons of precision die - castings. It has a complete industrial chain from dolomite mining to deep - processing of magnesium alloy. Its subsidiary new materials company plans to go public in the future [10]. - **Cost and Price**: The break - even point of the comprehensive cost of magnesium ingots in the industry is about 17,500 yuan/ton, and the current magnesium price is around 16,500 yuan/ton. The magnesium - to - aluminum ratio has dropped to 0.7, but the downstream application has not increased [11]. - **Downstream Application and Customers**: The utilization rate of the production capacity for two - wheeled electric vehicles is 50 - 60% due to the new national standard. The development of magnesium alloy in the automotive industry is slow. There is cooperation with Huawei and SAIC, and there is demand in the aerospace and satellite Internet fields [12]. - **Future Plan**: Plan to expand the primary magnesium production capacity by 50,000 tons after obtaining energy consumption and carbon emission indicators. Aim to increase the local magnesium production capacity from 42% to 50 - 60% of the national total and build a magnesium industrial cluster [13]. - **Futures Participation**: Will train professional futures talents to hedge price risks if magnesium futures are listed [14]. Company C - **Enterprise Situation**: Its market share of magnesium alloy ranks among the top three globally. It has a production capacity of 30,000 tons of primary magnesium, 60,000 tons of magnesium alloy (actual output of 40,000 tons), 6,000 tons of magnesium anodes, and 15,000 tons of magnesium powder. It has a large investment in high - pressure magnesium die - casting [15]. - **Cost and Raw Material Procurement**: It has a short - to - medium - term irreversible disadvantage in energy and environmental protection operation costs compared with northern Shaanxi. It locks in part of the silicon - iron procurement volume at the long - term average price and replenishes the insufficient supply of primary magnesium through waste recycling [16]. - **Downstream Application and Customers**: Automobile parts account for 70 - 80% of the demand for magnesium materials. It is also involved in two - wheeled vehicles, stage supports, household items, 3C products, and medical parts. The domestic demand for magnesium alloy is expected to reach 2 - 3 million tons in 3 - 5 years [17]. - **Future Plan**: Interested in accessing the capital market but has no clear listing plan [18]. - **Futures Participation**: Will consider using futures for hedging if the problems of small industry scale and product preservation are solved [19]. Company D - **Enterprise Situation**: Listed in 2020, it covers multiple industries such as smart home, new energy vehicles, industrial equipment, and power components. Its subsidiary has an annual production capacity of 30,000 tons of various parts and an annual sales revenue of 1.2 billion yuan, and it has a 5G + industrial Internet platform [20]. - **Downstream Application and Customers**: Its customers are mainly in the new energy vehicle, industrial robot, and aero - engine fields. Its aluminum alloy products are mainly for military enterprises. The difficulty of obtaining automobile orders has decreased compared to three years ago [21]. - **Future Plan**: Plan to build a global - scale industrial base for smart home, new energy vehicle, and industrial equipment parts, with an investment of 150 million yuan in 2026 and 300 million yuan in 2027. Also, invest more in military products and is involved in the commercial aerospace field [22]. - **Futures Participation**: Has previously contacted the futures market in pig iron smelting but did not participate due to its small scale [23].

Core Viewpoint - The magnesium ingot market in Shaanxi has experienced an overall price increase in early January, with a rise from 15,800 yuan/ton to 16,650 yuan/ton, marking a 5.38% increase, although the price trend shows signs of fluctuation and adjustment due to cost, demand, and inventory factors [3]. Cost Support Effect - At the beginning of the year, magnesium prices fell to the critical cost point for some magnesium producers, leading to losses for certain companies. However, the stabilization of prices for key raw materials like ferrosilicon and coal has alleviated cost pressures for magnesium producers, providing support for price increases [4]. Demand Surge - The demand for magnesium alloys is on a continuous upward trend, with an expected increase of 7,000 tons in production by December 2025. Major companies are experiencing full order books, driven by the automotive lightweighting policies that enhance the application of magnesium alloys in vehicles and electric two-wheelers. However, traders remain cautious, with limited purchasing activity focused on essential needs, leading to a slight price correction mid-month [5]. Inventory Dynamics - Previously, inventory levels were low, and some magnesium producers halted production due to operational losses, significantly reducing the available market supply. The inventory structure has improved, particularly with large manufacturers in regions like Fugu and Shenmu concentrating their stock, which has supported magnesium prices [6]. Market Sentiment Shift - Following a rapid price increase, a bearish sentiment has developed in the market, with end-users adopting a cautious wait-and-see approach. The selling behavior of intermediaries has notably lowered transaction prices [7]. Comprehensive Analysis - Magnesium prices are expected to continue a fluctuating downward trend, with potential for further declines. This is primarily due to increasing inventory pressure ahead of the Spring Festival, stagnant downstream demand, and increased selling by manufacturers to alleviate financial pressures [9].

Core Insights - The construction of the magnesium-based new materials project in Wutai County is progressing rapidly despite harsh winter conditions, with a target production date set for October next year [1] - The project, with a total investment of 4 billion yuan, aims to create a complete magnesium industry chain from ore mining to recycling, achieving 100% green circular utilization [1][2] Group 1: Project Development - The main structure of the project is 70% complete, with advanced magnesium refining equipment being installed [1] - The project is a subsidiary of Baowu Magnesium Industry and will complement an existing 50,000-ton magnesium alloy smelting project [1] - The construction site is actively working to meet environmental standards while ensuring efficient progress [1] Group 2: Technological Advantage - The vertical furnace magnesium refining process is the project's core competitive advantage, developed over ten years by Baowu Magnesium Industry [2] - This technology has received multiple honors, including recognition as a "national-level specialized and innovative small giant enterprise" [2] - The products are certified by IATF16949 and are applicable in various industries, including automotive and aerospace [2] Group 3: Strategic Location and Support - Wutai County has abundant high-quality dolomite resources, significantly reducing transportation costs for raw materials [2] - The project's location offers convenient access to transportation, being only 15 minutes from a highway [2] - As a key project in Shanxi Province's aluminum and magnesium deep processing industry, it benefits from favorable policies and local workforce training initiatives [2] Group 4: Market Potential - Magnesium, as a lightweight material, aligns with the dual carbon strategy and the green transformation of the manufacturing industry, indicating a broad market outlook [3] - Predictions suggest that by 2030, global magnesium usage in the automotive sector will exceed 2.7 million tons, with an average of 45 kg per vehicle [3] - The project is expected to drive local industrial development and contribute to Shanxi's transition from a magnesium resource province to a magnesium industry powerhouse [3]

Group 1 - The core viewpoint is that Yulin City in Shaanxi Province has made significant progress in optimizing the business environment by focusing on serving enterprises, the public, projects, and industries [1] Group 2 - The government has established a multi-dimensional communication mechanism, holding regular meetings with entrepreneurs, youth representatives, and community members to gather feedback and address issues, resulting in a 95% rectification rate for 818 suggestions [1] - A total of 60 offline "business environment reception rooms" have been set up to provide a platform for problem-solving at the community level [1] - The implementation of a market entity evaluation system has led to representatives from state-owned and private enterprises scoring 32 departments, thereby enhancing service quality [1] Group 3 - A closed-loop management system has been created to improve efficiency, tracking 125 key tasks dynamically and utilizing a platform for immediate supervision and service time reduction [1] - 45 "one matter handled at once" initiatives have been implemented, with notable reforms in property registration and utility transfers being recognized as provincial pilot projects [1] - Six service experiences, including "Ten-Star Service" and "Verification and Registration Integration," have been promoted throughout the province [1] Group 4 - A project support system has been established, introducing a specialized team for joint review and approval, with 28 types of projects exempted from construction planning permits [1] - A "one project, one file" and "one-on-one" concierge service has been initiated for key projects, along with the establishment of 20 "escort officer workstations" to resolve issues [1] Group 5 - The global magnesium industry cluster development seminar has been held to promote the digital transformation of small and medium-sized enterprises, with 12 companies completing upgrades [2] - A total of 22 high-tech enterprises and 108 technology-based small and medium-sized enterprises have been cultivated [2] - A talent pool for private enterprises has been established, with 1,633 individuals registered and 21 technology specialists dispatched to provide services [2]